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31 General Economic Condition and Outlook of the City As a result of the economic recession experienced in much of the State beginning in 2008, the City’s General Fund revenues decreased commencing in fiscal year 2008-09. Since fiscal year 2011-12, General Fund revenues have steadily increased and now surpass the pre-economic recession General Fund revenues. The increase in General Fund revenues has been due, in part, to the approval by the voters of the City in November 2010 of “Measure Z.” Measure Z increased the sales tax in the City by 0.25%, to be used by the City for general purposes, and which was subsequently extended and increased to 0.50% pursuant to Measure HH effective April 1, 2015. See “– Sales and Use Taxes” for a discussion regarding Measure HH. Likewise, median home prices in the City are now approximately $600,000, nearing the median price at the 2006 peak. The City’s unemployment rate has also improved to 3%. For fiscal year 2017-18, the City projects an assigned and unassigned General Fund balance of approximately $42 million as of the end of fiscal year 2017-18. In addition, the City projects that General Fund revenues will total approximately $112 million for fiscal year 2017- 18. As compared to the final budget for fiscal year 2017-18, projected General Fund revenues are approximately $2.5 million higher than budgeted. The City’s General Fund expenditures for fiscal year 2017-18 are projected to total approximately $99 million, or approximately $8.5 million less than that projected in the City’s final budget for such fiscal year. For fiscal year 2018-19, the City’s budget focuses on providing essential services. Over one-half of the General Fund revenue is allocated to support public safety activities. General Fund revenues and expenditures are each projected to total approximately $115 million for fiscal year 2018-19. In particular, sales tax revenues are projected to increase by 4% in fiscal year 2018-19. Sales tax revenues account for approximately 39% of total General Fund revenues. Such revenues include Measure HH revenues projected in excess of $11 million. However, sales tax revenues are highly volatile since the level of consumer retail spending directly influences it. Additionally, property tax revenue is anticipated to continue to be a major source (approximately 19%) of the City's total General Fund revenue. In addition, in the biennial budget for fiscal years 2017-18 and 2018-19, the City projected additional General Fund revenues to be generated in fiscal year 2018-19 from taxes levied pursuant to Measures OO, PP and NN passed by the voters in the City on November 8, 2016. See “– Other Taxes and Revenues” below for a discussion of Measures OO, PP and NN and related taxes. While the City has been able to approve balanced budgets with noreductions in program or services, it continues to face increased operating costs. For example, as described below, the City’s contribution rates for employee pensions continue to rise due to prior portfolio losses and changes in actuarial assumptions by the California Public Employees’ Retirement System (“CalPERS”), with additional increases projected in future years. See “– Employee Retirement System” below. The City forecasts a future structural deficit if no policy changes are implemented. See “ – City Reserves” above. The City has taken pro-active measures to raise revenues and manage costs which have enabled it to invest in necessary capital projects while maintaining a balanced budget. The passage of Measures HH, OO, PP and NN have also increased the City’s revenues as described above. To further address the forecasted structural deficit, the City may propose another revenue measure in 2019 or 2020. Additionally, an internal CARE Committee was