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<br /> <br />City of San Leandro <br />Mid-Year Perfonnance Report <br /> <br />Ending December 31, 2006 <br /> <br />EXECUTIVE SUMMARY <br /> <br />GENERAL OVERVIEW AND ECONOMIC OUTLOOK <br /> <br />Operationallv Balanced? It's Possible.. . <br />· Year-to-date General Fund operations end the mid~year utilizing $1.2 million of available reserves. <br />However, the City is projecting revenues and expenditures to balance, operationally, by June 30, <br />2007. The use of reserves primarily reflects the timing of large revenues not yet received. <br /> <br />· Sales tax revenues currently match the City's projected growth of 3 % over the prior year. The City <br />will receive $1 million as a one-time true-up to 1/4% ofthe City's 1 % sales tax, which was swapped <br />by the State for an equal amount of property tax paid. The swap was paid as an estimate to the City <br />in 2005-06. <br /> <br />· Despite the slowdown in the real estate market, economists are consistent with projecting slow to <br />moderate growth through 2007 and increased economic growth in 2008. <br /> <br />· For the second half of2006, the Bay Area CPI of 3.3% is improved over the prior year index of <br />2.0%. The Bay Area CPI remains lower than the Los Angeles regional index of 3.47% and higher <br />than the national index of 2.6%. <br /> <br />· The Alameda County Assessor reported a 9.38% increase to property assessed valuations in 2006-07 <br />from 2005~06, which is better than the City's conservative growth projection of 7.0% but slightly <br />below the 9.46% Alameda County growth rate. <br /> <br />· LAIF's investment yield as of December 31, 2006 is at 5.11 % as compared to 3.63% a year ago. <br />The City invests approximately 42% of its idle cash in LAIF and 52% with its portfolio manager, <br />Chandler Asset Management. <br /> <br />Warnine.. Not Yet In the Clear. . . <br />· The City begins collecting 2007 business license renewals at the new voter-approved rate in January <br />2007. The modified rate is expected to generate an additional $2 million in annual revenue. <br /> <br />· The $2.4 million expected from 911 Fee remains a revenue at-risk program. The unfavorable ruling <br />against Union City is expected to be heard on appeal in 2007 while a decision on the Stockton <br />ordinance is expected within 90 days following its February 2007 trial. <br /> <br />· During the first quarter, the following previously reduced services were approved for restoration: <br />Sunday library services, a third School Resource Officer, the Cherry Festival celebration, Holiday <br />lighting, and community-based organization funding. <br /> <br />· As a result of receiving early repayment of the 2004 VLF Gap loan, the City is subject to the <br />possibility that the State could again borrow from local governments under specific conditions <br />beginning in 2008. <br /> <br />2 <br />