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8. STAFF REPORTS A. Comprehensive Annual Financial Report for FY 1995-96, and summary of the General Fund financial results. (502) REPORT: Director of Finance and Financial Planning Ponty, December 9, 1996, and Comprehensive Annual Financial Report for Fiscal Year ended June 30, 1996, Maze & Associates, Auditors Director Ponty presented the staff report and said the CAFR summarized all the financial transactions for FY 1995-96 and described the City's financial position as of June 30, 1996. Using overheads Director Ponty described the 1995/96 General Fund Highlights, Sales Tax Revenue, Property Tax Revenue, Property Transfer Tax, and Building Permit Revenue. He reported the additional transfer of $600,000 from the General Fund to Capital Projects, consistent with Council policy to use one time only money for one time only purposes. Transfers totaled $1.1 million from General Fund into Capital Projects, exclusive of the $1.9 million of Utilities Users Tax. Director Ponty reported that employee costs were up about 4% (within budget) and accounted for approximately 63% of General Fund expenditures, with safety personnel being the largest employee group expenditure. Director Ponty reported the total general fund revenues were up 5.18% over 1994/95 revenues and $1.6 million above the amount budgeted for 1995/96 attributable to an expanding local economy and a non-recurring PERS rebate of $571 ,000. Director Ponty advised that sales tax provided 28% of general fund revenues and property taxes provided 25% of general fund revenues. He reminded Council that several years ago the State of California "took" additional property taxes from cities, amounting to a recurring loss of $3 million per year from Redwood City coffers. Director Ponty described the volatility of sales taxes, business to business sales, auto sales in Redwood City, the Transient Occupancy Tax and the impacts of new hotels in the area. In response to Mayor Hartnett's questions regarding $1.6 million in additional revenues and $600,000 in fewer expenditures but only $59,000 in the reserved fund balance, Director Ponty reported that transfers out of the General Fund to other funds (an additional $600,000 transferred to Capital Projects Fund), and reserves set aside for encumbrances, inventories and future street projects whose budgets are already established, reduced the amount available. "Whatever isn't spent, or transferred out, or designated for another purpose, that's what's left over." Director Ponty added that of the unrestricted reserve balance of $6,250,000 as of June 30, 1996, Council had designated $4.9 million in reserves, and approximately $600,000 was Utilities Users Tax revenue that had not as of that date been transferred out to CIP but will be during the FY 1996-97 year. Regular Council Meeting MINUTE BOOK NO. 55 December 9, 1996 Minutes Page 7 Page No. 070