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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE: October 21, 2008 <br />TO: Steve Hollister, Interim City Manager <br />FROM: Perry Carter, Interim Finance Director <br />SUBJECT: Review of Major General Fund Revenues - 1St Quarter 2008-09 <br />Attached for your review is an analysis of major revenue accounts for the General Fund for the <br />first Quarter of 2008-09 (July through September). The purpose of the review is to provide an <br />early look at key General Fund revenues for 2008-09, and how they are being impacted by <br />current economic conditions. <br />The attached schedule presents operating revenue information for the General Fund for the prior <br />and current year. From left to right, the first column presents actual revenues for the fiscal year <br />2007-08. The second column presents budgeted revenues for the current fiscal year 2008-09. <br />The third column presents updated revenue projections for current year. Finally, the fourth <br />column shows the variance, positive or negative, between the Adopted Budget 2008-09 and the <br />Updated Projections, 2008-09 columns. <br />A quick look at column 4, the Variance column, indicates that the General Fund will experience <br />a revenue short fall for 2008-09 of approximately $2.1 million. Three main revenue sources <br />account for the projected revenue downturn. These key revenues are discussed briefly below: <br />• Sales Tax-this revenue is responsive to the ups and downs of the economy and not <br />surprisingly is falling short of projections. More specifically, San Leandro is <br />experiencing declines in the major economic categories of General Retail, Business to <br />Business, Transportation, and Construction. The only economic category to better the <br />previous quarter is Food Products, which is up slightly. Based on collections through the <br />quarter and estimates by the City's Sales Tax consultants, staff is reducing this revenue <br />from $22.6 million to $21.8 million, a revenue short fall of approximately $800,000. <br />• Property Tax Property taxes paid by residential and business/commercial property <br />owners in San Leandro are the source of this revenue category. In developing the <br />property tax revenue staff assumed a net growth rate for San Leandro of 4% fro 2008-09. <br />Based on Alameda County information, staff believes that this is still a valid estimate. <br />Unfortunately, actual property tax revenue for 2007-08 was approximately $500,000 less <br />