Finance Highlights 2010 1221 - Laserfiche WebLink

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the year still ended with an operating shortfall, it was about $800,000 less than originally anticipated. FY 2010 -11 In response to continued revenue losses, Council adopted the FY 2010 -11 budget with significant General Fund expenditure reductions. However, even with these sizeable expenditure reductions, the budget projected a shortfall of almost $3 million and an ending balance of $1.3 million. This represents a significant depletion of the General Fund reserve and a $3 million operating shortfall that required correction since future budgets would not be able to use one -time reserve funds to balance. • The temporary quarter cent sales tax measure (Measure Z) is projected to generate about $4 million per year. The passage of this measure in November 2010 provides critically needed revenue to the City's General Fund. This new revenue is intended . to help balance the recurring $3 million operating shortfall, and to begin building back the depleted reserve — starting in FY 2011 -12. • Measure Z revenue will not be realized until the beginning of FY 2011 -12 due to the. April 1, 2010 start date of the increased tax. A prorated amount of revenue may be accrued back to FY 2010 -11 (revenues received April — June 2010), depending on the receipt of the last quarter revenues. • At the September 2010 Finance Committee meeting, staff projected some small improvements to sales tax, but made no significant adjustments to FY 2011 projections. • A recent review of FY 2010 -11 revenues indicate some one -time and recurring improvements to the current fiscal year. However, a couple of revenues have been adjusted downward to reflect current trends (including Interest Income, Gifts & Donations). Revenue changes Sales Tax. At the end of September 2010, MuniServices provided information regarding a true -up of the City's Triple Flip backfill revenues — based on data from the Board of Equalization.. Basically, overpayments in FY 2008 -09 resulted in decreased payments in FY 2009 -10. An adjustment back to the normal base provides an increase in FY 2010 -11of $1.7 million: one -time adjustment of $700,000 and a recurring base increase of $1 million. Property Tax. The FY 2010 -11 adopted budget conservatively projects an $800,000 reduction from FY 2009 -10. First installment revenues received in mid - December (late last week) indicate a slightly better performance for unsecured