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MA,v,6.1.F. - Page 42 �D ANALYSIS Long-Term Debt- Issues described in detail in Notes 6 and 7 to Financial Statements. Outstanding Debt(in Millions) Governmental Business-Type Activities Activities Total 2012 2011 2012 2011 2012 2011 Variance $ $ $ $ $ $ Revenue bonds 5.882 7.892 84.217 76.266 90.099 84.158 7.059% Tax increment bonds 43.767 43.767 -100.000% Loans 0.085 1.789 1.819 1.789 1.904 -6.040% Accrued sick leave and vacation 9.882 9.539 1.002 0.833 10.884 10.372 4.936% Total long term debt 15.764 61.283 87.008 78.918 102.772 140.201 -26.697% $PECIALASSESSMENT DISTRICT DEBT Special assessment districts in different parts of the City have also issued debt to finance infrastructure and facilities construction in their respective districts. At June 30, 2012, a total of $25.04 million in special assessment district debt was outstanding, issued by three special assessment districts. This debt is secured only by special assessments on the real property in the district issuing the debt, and is not the City's responsibility, although the City does act as these Districts' agent in the collection and remittance of assessments. PRIVATE PURPOSE TRUST FUND DEBT On February 1, 2012, the Redevelopment Agency of the City of Redwood City was dissolved pursuant to California State law, and as of that date, the long-term debt associated with the former Redevelopment Agency was transferred to a private purpose trust fund for the Successor Agency. At June 30, 2012, the Successor Agency had a loan outstanding in the amount of$42,321, and tax allocation bonds outstanding in the amount of$44,159,315 including unamortized premium and accreted interest payable. ECONOMIC OUTLOOK AND NEXT YEAR'S BUDGET Redwood City and the surrounding area is beginning to shows signs of emerging from the recession that gripped the nation from 2007 to 2009. Redwood City, like many cities, is heavily dependent upon property taxes and sales taxes with these revenues accounting for 41% and 19% of general fund revenues respectively. Both of these revenue sources are heavily reliant on the consumer who is beginning to show some signs of life after having retreated during the recession. The local employment situation is rebounding which is translating into solid growth in property taxes and sales taxes up 5%and 8.5% respectively over FY 2011/12. Although the City Council and staff have made significant progress in bringing on-going general fund revenues and expenditures into balance, more work remains ahead as we are not yet forecasting revenues in excess of expenditures. A combination of reducing expenditures, through programmatic cuts and reductions in the cost of employee benefits, along with voter approved tax increases have put the general fund on a firmer financial footing, but risks to revenues and rising costs require continued diligence. 14