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MANAGEMENT'S�ISCUSSION AND QNALYSIS 6.1.F. - Page 39 redevelopment area. The general fund received $3.5 million from the county as its share of the Education Revenue Augmentation Fund (ERAF) rebate in FY 2011/12, an increase of$37,419. ERAF, which was created by state law in the early 1990's, allowed the state to shift on an ongoing basis a portion of each city, county, and special district's property taxes to school districts. This shift allowed the state to decrease the state's general fund support to schools throughout the state and concomitantly reduced state funding of schools. Within each county, ERAF revenues are allocated to schools based upon a formula that considers, among several factors, the average daily attendance and the amount of each school district's own property tax revenue. Within San Mateo County, the outcome of applying this formula was that the school districts did not require all of the funds shifted from the cities, county, and special districts. Consequently, these funds were returned to each entity in proportion to the amount that was initially collected. Fire services revenue increased $1.1 million due to the new contract to provide fire management services to the City of San Carlos. General fund expenditures increased $1.8 million as a result of increased public safety expenditures related to overtime used to cover vacancies, a new position related to the contract with City of San Carlos, payout of accumulated leave balances to retiring employees, and increased retirement costs.These increases were offset by a decrease in developer reimbursed planning projects and a decrease in lease payments related to the matured 1998 Lease Revenue Refunding Bonds. Transfers out of the general fund increased $3.3 million in FY 2011/12 due to the transfer of land held for redevelopment to the low and moderate income housing asset fund. This transfer was to reverse a FY 2010/11 transaction that moved lands from the former Redevelopment Agency to the City's general fund. Housing Legal Aid Society Fund — This fund accounts for revenues previously deposited in the former redevelopment agency low and moderate income housing fund pursuant to an agreement with the Legal Aid Society to set aside general tax increment revenue for housing purposes. After the February 1, 2012 dissolution of the redevelopment agency, this fund was created to account for this accumulated balance. At June 30, 2012, a $10.3 million liability was reflected as due to other governmental agencies as the State of California is reviewing all housing assets related to the former redevelopment agency for potential transfer to the State. Capital Outlay Fund -This fund accounts for resources provided to finance general governmental capital projects. In FY 2011/12, the capital outlay fund generated $.3 million in revenue, most of which was from interest. This fund was also the recipient of$8.5 million of transfers from the general fund. Total outlays were $5.6 million of which $1.6 million met with City's criteria for capitalization. The balance ($4 million)was expended in FY 2011/12. Total outlays in the prior year (FY 2010/11) were $6.7 million. Of the capital outlay fund's $24.9 million fund balance, $18.8 million was committed, and $6.1 million was assigned. Redevelopment Agency Fund — This fund accounted for resources provided to finance the City's former Redevelopment Agency, a separate legal entity organized pursuant to the community redevelopment law of the Health and Safety Code of the State of California, and dissolved by State law on February 1, 2012. The City Council also served on the Board of Directors of the Redevelopment Agency. The Redevelopment Agency's fund balance is now zero. Low and Moderate Income Housing Fund — This fund accounted for redevelopment property tax increment revenues which were restricted for low and moderate income housing until the dissolution of the Redevelopment Agency on February 1, 2012.The fund balance is now zero. 11