Reso 2011-053 Attachment - Laserfiche WebLink

Home

Component Units As of June 30, 2010 there were no discretely reportable component units. The City's blended component units include: operations of the San Leandro Redevelopment Agency, the San Leandro Parking Authority, the San Leandro Public Financing Authority, and the San Leandro Economic Development Agency The CAFR for the year ending June 30, 2010 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 of San Leandro 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 a varied collection of 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 continued 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 San Leandro's local revenues. While there are some signs of an economic recovery, it is very slow. 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 fiscal year 2004-05 the City's General Fund collected approximately $21.7 million in sales tax revenue. This amount fell to $19.3 million in 2008- 09, and continued its decline in FY 2009-10 to $17.8 million, a reduction in annual revenue in the last five years of 18%. Similarly, property tax revenue which generally shows positive growth of several percent each year is displaying the effect of the poor economy. FY 2009-10 ended the year with a 3.5% reduction in Property Tax revenues, largely attributed to a decreased in assessed valuation. This is the first time in many years that the City has seen a reduction in its property tax revenues. 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. Given the number of countywide appeals, we expect a further reduction in Property Tax revenues next fiscal year as well. VU