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Honorable Mayor and Members of the Council: <br /> <br />BACKGROUND <br /> <br />The purpose of this report is to present the status of operating and capital improvement budgets. <br />Actual revenues and expenditures to date have been analyzed and compared to budgeted <br />revenues and expenditures, respectively. Taking seasonal variations into account, projections for <br />the next six months were then made to enable staff to update the budget for the entire fiscal year. <br />Furthermore, since staff is in the process of reviewing the current two-year (1995-96/1996-97) <br />operating budget and capital improvement program as of the end of the first year, the midyear <br />update of the current year's projections provides a good starting point for updating 1996-97 <br />projections. <br /> <br />OVERVIEW OF SECOND QUARTER 1995-96 <br /> <br />Most development related revenues will meet or exceed the original projections made last spring <br />for 1995-96. Hotel Taxes and Interest Income are also likely to exceed original projections. <br />However, property tax and sales tax projections are being revised downward as a result of the <br />most recent information staff has obtained. <br /> <br />Net salary savings in the General Fund due to untilled positions is $1.1 million. However, this <br />mount is offset by increases in overtime, utility costs, contract services, equipment, and costs <br />associated with the San Francisco land review. <br /> <br />DISCUSSION OF GENERAL FUND REVENUES <br /> <br />Appendix F (starting on page 35) details all General Fund revenues by line item, comparing <br />original projections with the recommended new projections. Appendix E (starting on page 27) <br />summarizes the revenues by major type. A discussion of major revenues follows below. <br /> <br />property_ Taxes <br /> <br />Property tax revenue projections are being decreased by $200,000 to $12.7 million, based on <br />updated projections received from the County on March 25. Estimated transfer tax revenue <br />projections of $340,000 are not being adjusted. <br /> <br />While staff has received the total dollar figure for sales tax through the Christmas quarter, details <br />were not available in time to analyze them for this report. However, based on information to <br />date, staff is decreasing the revenue projection by $200,000 to 12 million. This reduction in the <br />projection results from the loss of $250,000 in March sales tax revenues due to a reallocation to <br />another city that resulted from a State audit. <br /> <br />SR96:120 <br /> 2 <br /> <br /> <br />