AgdaPkt 2014-01-13 Interview, Closed and Regular

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ATTACHMENT 1 7.1.G. - Page 6 variance from increased property taxes, sales and other taxes, offset by the unfavorable expenditure variance resulting from unbudgeted payouts for employee separations and public safety overtime expenditures exceeding budget, about $2.2 million was added to reserves in FY 2012/13 leaving a balance of $19.4 million in unassigned fund balance as of June 30, 2013. 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 2013/14 budgeted revenues) leaves projected fund balance as of June 30, 2014 at approximately 23 %. 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. 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 2012/13, the City received $1.61 million in "Measure A" revenue, representing a 9.7% increase over the $1.47 million in FY 2011/12. Gas tax revenues (received from the State through gasoline taxes paid by motorists) decreased by $0.4 million or 18% in FY 2012/13 primarily due to a decrease 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. This decrease resulted from the correction by the State of misallocations in FY 2011/12 and part of FY 2012/13. 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 2012/13, the City added one new special revenue fund, the Planning Cost Recovery Fund to account for revenues and expenditures related to reimbursed planning activities previously accounted for in the General Fund. Debt Service Funds Highlights General Fund (Public Financing Authority Bonds and Lease Revenue Refunding Bonds /Lease) 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 bonds was refunded to realize savings from lower interest rates. In FY 2003/04, the City issued $11.5 million of bonds to refund the balance ($6.7 million) of the 1991 bonds and to provide $4.4 million for new projects. The annual debt service for both of these bond issues is paid by proceeds from the utility users' tax and communications users' tax. During FY 2012/13 the City entered into a lease agreement with BBVA Compass