AgdaPkt 2014-01-13 Interview, Closed and Regular

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City of Redwood City 7.1. G. - Page 40 Management's Discussion and Analysis For the year ended June 30, 2013 At June 30, 2013, the City's governmental funds reported combined fund balances of $96 million, which reflects an increase of $4.5 million from the beginning year balance. Governmental fund revenues increased $3 million this year to $111.6 million. Significant increases occurred in the general fund, the capital outlay fund, the traffic mitigation fees fund, and the parks impact and in lieu fee fund offset by decreases in the redevelopment agency fund, the low and moderate income housing fund, the transportation grants fund, and the One Marina Community Facilities District fund revenues. Expenditures, including capital outlay, decreased $5.6 million this year to $109.9 million. Most of the decrease was attributable to the $10.3 million expenditure in the prior year 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, offset by increased expenditures in the capital outlay fund. The general fund is the primary operating fund of the City. At June 30, 2013, unassigned fund balance of the general fund was $19.4 million, while total fund balance increased to $21.8 million from a beginning fund balance of $19.8 million primarily due to an increase in revenues. 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 23.8% of total fund expenditures, while total fund balance represents 26.7% 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 $4.1 million this fiscal year primarily due to increases in property taxes, sales and other taxes, and building permits, offset by declines in other categories of revenues. Sales taxes increased $2.2 million and transient occupancy tax increased $0.6 million due to the continued recovery from the recession and the first full year of transient occupancy tax revenue received under the voter approved increase in the transient occupancy tax rate from 10% to 12% (effective January 1, 2012). Property taxes increased $1.9 million. The increase in property tax resulted from an increase in assessed value and an increase in revenue received in the general fund from the county as its share of the Education Revenue Augmentation Fund (ERAF) refund in FY 2012/13, an increase of $680,312 for a total of $4.2 million. 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. Licenses and permits increased $0.63 million due to an increase in building permits related to increased building activity. 12