Reso 2013-029 - Laserfiche WebLink

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vii Parking Authority, the San Leandro Public Financing Authority, and the San Leandro Economic Development Agency. The CAFR for the year ending June 30, 2012 provides a financial account of those activities, organizational elements, and City functions for which the City Council provides policy direction and general oversight. It presents financial information on the activities of the City itself and the component units of the City upon which the City Council is authorized to impose its will. The operating nature of the City’s component units determines how they are reported in the financial statements. The activities of component units that provide financial benefit or create financial burden for the City are blended within the City’s general financial statements. Component units that have no discernable financial impact upon the City are presented separately. ECONOMIC CONDITION OF THE CITY The City of San Leandro has a diverse and strong economy, with its business community comprised of varied businesses ranging from neighborhood coffee houses and fine restaurants, large food processing centers, and regional shopping opportunities, to cutting edge technology. While the economic base has dramatically changed from its agricultural early years, San Leandro continues to expand on its sound business base with the ongoing development of such projects as a new downtown parking structure, a multi-family housing development, a new regional hospital, and the continuing revitalization of downtown San Leandro. The recession resulting from the global financial and credit market meltdown in late 2008 has had a direct and dramatic impact on the City’s local revenues. While there are some signs of an economic recovery, median home prices are still $320,000, 39% less than the median price at the 2006 peak. The unemployment rate is still higher than 8%, well above average unemployment of the past decade. The City’s General Fund supports many of the City’s key services, such as public safety, library and parks and recreation. Revenue to this critical fund, generated largely from sales and property taxes, has shrunk. As consumers and businesses cut back on spending in response to the recession, less revenue is generated for the City. For example, in 2006-07 the City’s General Fund collected approximately $23.4 million in sales tax revenue. This amount fell to $19 million in 2008-09, and continued its decline in 2009-10 to $17 million, a reduction in sales tax revenue in the last five years of 18%. With the passage of Measure Z (0.25% sales tax increase) effective January 1, 2011, sales tax revenue improved by 11% from the prior fiscal year to a total of $24.1. Similarly, property tax revenue which generally shows positive growth is displaying the effect of the poor economy. Fiscal year 2011-12 ended with a 16% reduction in Property Tax revenues, largely attributed to the dissolution of the Redevelopment Agency as of February 1, 2012 wherein property taxes were withheld by the State of California and are no longer revenue to the City. As assessed valuation in property value continues to decline in San Leandro as well as other cities in California, the property tax revenue is no longer the top revenue generator. While these revenues remained relatively stable during the recession, the nature of the assessment valuation and appeals process caused these revenues to lag the economy by a couple of years.