Finance Highlights 2011 1202 - Laserfiche WebLink

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Fiscal Year 2009 -10. For Fiscal Year 2009 -10, the City identified a $3.6 million operating deficit in the General Fund, which reflected cost cutting measures administered by the City to reduce its expenditures by 4.9% from the prior fiscal year. Annual revenues received decreased by 0.58% from the prior fiscal year due to the continued economic downturn experienced by the City since 2008. Specifically, decreases in annual revenues received are attributable to a surge in unemployment, which deteriorated the City's labor market, and a concurrent decline in consumer confidence. The decline in consumer confidence is reflected in the City's financial report as property and consumer good sales continue to decrease. Fiscal Year 2010 -11. In Fiscal Year 2010 -11, economic conditions resulted in a slow paced recovery throughout the City, with continued high unemployment, and a weak housing market. Statewide, local governments continued to experience declining revenues. San Leandro's fiscal conditions improved slightly over original projections. The 2010 -11 year -end forecast for the General Fund has improved over the Adopted Budget, largely due to an increase in projected revenues. Revised projections reflected an operating increase of $2,261,000 for the fiscal year. Overall, City Staff project a net fund balance in the General Fund of about $8.8 million at the close of Fiscal Year 2010 -11, an improvement of $7.5 million over Adopted Budget projections. With respect to Fiscal Year 2010 -11 revenues, the City received the following approximate percentages of budgeted revenues in Fiscal Year 2010 -11: General Fund Revenues Actual Budget % of Budget Property Taxes $26,720,790 $26,404,742 1.012% Sales Taxes 21,811,494 17,850,000 1.22 Franchise Taxes 4,124,846 3,940,000 1.05 Transient Occupancy Taxes 351,612 250,000 1.40 Utility Users Taxes 9,932,893 9,635,000 1.04 The City currently estimates that Fiscal Year 2010 -11 revenues exceeded expenditures. The future economic conditions of the City remain uncertain, in part due to adverse impacts it continues to face as a result of State action. The State's budget balancing plans have and will continue to harm the City's finances, as it may not receive State funds as previously received and presently anticipated, and the State's efforts to eliminate redevelopment agencies could also have a dramatic impact upon the City's financial circumstances. See "RISK FACTORS — Impact of State Budget on City Revenues ". City Staff continues to monitor State budget developments and the progression of legal challenges to the State's attempted elimination of redevelopment agencies, providing the City Council with updated information regularly Fiscal Year 2011 -12. The City's three largest sources of revenues are property taxes, sales taxes and the utility users taxes. With respect to property taxes, the County has confirmed in writing that the City's Fiscal Year 2010 -11 assessed value is likely to be at least equal to its Fiscal Year 2010 -11 assessed value. Sales taxes are no longer the City's largest source of tax receipts and the City is not certain whether reduced sales tax revenues is part of a short -term (recessionary) trend or a long term trend. The City finished Fiscal Year 2010 -11 with an unreserved, undesignated General Fund balance of approximately $6.0 million. The City anticipates the need to undertake further structural cost reductions in order to maintain a balanced budget in the future. A -10