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7.1.G. - Page 45 <br /> Management's Discussion and Analysis <br /> For the year ended June 30, 2013 <br /> which are sensitive to consumer confidence, reflecting the strength of the local job market. Given the <br /> continued increase in the number of local residents employed and the low unemployment rate we are <br /> hopeful that these revenues, along with other revenues that reflect strong consumer demand, will <br /> continue to grow. <br /> The adopted FY 2013/14 general fund budget projects a surplus of $1.2 million, or about 1.3% of <br /> anticipated revenues. In FY 2014/15 this surplus could turn into a deficit of $1.8 million if the <br /> Educational Revenue Augmentation Fund refund, a source of property tax revenue tied to K -14 <br /> education funding, is eliminated due to the changes in the school funding formulas. In FY 2015/16 the <br /> operating deficit could widen if the California Public Employees Retirement System, as is being <br /> discussed, reduces their assumed rate of return on investments from 7.5% to 7.25% and updates their <br /> mortality assumptions to reflect the longer expected life expectancy of retirees. City staff is monitoring <br /> each of these factors very closely and is keeping the City Council apprised of significant developments. <br /> CONTACTING THE CITY'S FINANCIAL MANAGEMENT <br /> This Comprehensive Annual Financial Report is intended to provide citizens, taxpayers, investors, and <br /> creditors with a general overview of the City's finances. Questions about this report should be directed <br /> to the Finance Department, at 1017 Middlefield Road, Redwood City, CA 94063. <br /> 17 <br />