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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE: January 27, 2010 <br />TO: Steve Hollister, City Manager <br />FROM: Perry Carter, Interim Finance Director ~` <br />SUBJECT: General Fund Mid-Year Budget Review 2009-10 <br />Attached for your review is an analysis of revenue and expenditure accounts for the General <br />Fund at mid-year (July through December-2009-10). The purpose of the review is to provide a <br />review and update of General Fund revenues at the mid-year point and to project revenues and <br />expenditures for the current fiscal year, 2009-10. <br />Schedule A, attached, presents operating revenue and expenditure information for the General <br />Fund for the prior year, current year budget, adjustments and projected actuals for 2009-10. The <br />following is a description of each of the six columns found on the attached schedule (from left to <br />right): <br />• 1St column -actual revenues and expenditures for the fiscal year 2008-09 <br />• 2"a column -amended budget for 2009-10 (includes encumbrances, approved budget <br />changes and proposed budget changes for 2009-10. <br />• 3ra column -July 2009 revenue updates for 2009-10. <br />• 4th column -November 2009 revenue updates for 2009-10 <br />• 5th column -January 2010 revenue updates for 2009-10. <br />• 6th column -Estimated actuals (revenue and expense) for 2009-10. <br />A quick look at column (5), the January 2010 Update, indicates that the General Fund will <br />experience an additional revenue shortfall for 2009-10 of approximately $2.0 million. Several <br />revenue sources account for this downward revision as of December 31, 2009. These revenues <br />are briefly discussed below: <br />• Sales Tax -this revenue is responsive to the ups and downs of the economy and not <br />surprisingly, given the state of the economy, continues a downward spiral. In addition, <br />advances from the County (computed by the State but paid by the County from ERAF <br />funds) for the "triple flip" component of the sales tax have been reduced for 2009-10. <br />These two factors result in a downward reduction to sales tax revenue of $950,000, as <br />shown in Column 5. <br />More specifically, the reduction in taxable sales activity from the second quarter to the <br />third quarter accounts for approximately $500,000 of the reduction noted above. The <br />remaining $450,000 reduction reflects net cash flow projections for the triple flip <br />