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came from property tax, sales tax, and hotel /motel tax revenues. Expenditures were less than anticipated, primarily because materials, supplies, and services were less than projected in the water and sewer area. While the budgeted to actual amount is $2.6 million higher than anticipated, revenues essentially equaled expenditures and General Fund reserves increased only from $25.2 to $25.8 million. The $2 million in designated carryover reserves was not needed to balance this year's budget and will be carried over to the following year, where staff has again anticipated a deficit. Staff also carried over approximately $600,000 in reserves for purchase orders, open orders, and outstanding contracts, increased the 10% reserve for economic uncertainties to $8.5 million, and maintained $2 million in reserves for golf debt service. Ms. Wagner compared the 2009 -10 fiscal year to previous years. Fiscal year 2009 -10 revenues are down $9 million from fiscal year 2007 -08. While property tax revenues are up $1.5 million over that budget cycle, the City has experienced the following decreases: Sales tax revenues - $5.7 million; Hotel /motel tax revenues - $600,000; Interest income - $1.3 million; Development user fees - $1.6 million; Recreation fees. Ms. Wagner reviewed the Water Fund, which began with a fund balance of $8.3 million. Water revenues were $2 million less than projected as a result of conservation and the delay in rate increases. Expenditures were also less than anticipated, due in majority to the Zone 7 contract rates. Despite the increase in revenues and decrease in expenditures, the fund ended with a balance of approximately $6.7 million. She stressed that staff and the Council made a conscious decision to reduce reserves by using those funds to mitigate rate increases. The Sewer Fund opened the fiscal year with $3.5 million in reserves. Revenues were slightly less than projected due to lower DSRSD rates. However, expenditures to DSRSD were lower in the same amount, resulting in a wash. Like the Water Fund, staff structured sewer rates to use a portion of the reserves to offset rates. The fund is reduced to $3.1 million but staff has set rates going forward to maintain no less than a $3 million fund balance. Ms. Wagner reviewed the Golf Course Fund, which started the year with a fund balance of $1.8 million. Revenues, comprised of green fees, cart fees, food and beverage, and range fees were approximately $140,000 less than anticipated. The 63,685 rounds of golf played this fiscal year were down 4% from the 2008 -09 fiscal year. Expenditures were also less than projected, mostly in the area of materials and supplies. The Golf Course Fund ending balance is $1.2 million and, while less than the beginning fund balance, it is more than staff anticipated. When considering the $1.5 million in debt service on the facility, revenues did not cover the cost of operations. However, the City has a fiscal policy requiring that the net income from the golf course operation, plus the $2 million in reserves, have to prefund two years debt service. Councilmember Sullivan asked how many rounds per year were estimated in the facility's pro forma. Ms. Wagner stated approximately 75,000 rounds. This was based on annual rate increase of $1 per year, which has been done. Expenditures do need to be monitored very closely because of the debt service, which most private golf courses would not be able to fund out of their revenues. Mr. Fialho noted the pro forma started with an assumption of about 57,000 per year and graduated up to 75,000 rounds over a period of time. While that target has not yet been met, current play is slightly over certain projections. Ms. Wagner stated staff is in the process of completing an organizational assessment to prepare for the next two -year budget. Staff will present a five year forecast with revenue estimates updated to include the impact of new development. Development user fees, like the City Council Minutes Page 5 of 16 December 7, 2010