Item 3C: Resolution on FY11 CAFR

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Total business-type net assets increased $5.1 million in the current fiscal year. Significant issues regarding proprietary funds are as follows: The Ambulance Transport Fund reported a $1.2 million increase in net assets. The increase was mainly due to $1.5 million in operating income that was offset by $0.3 million in transfers out. The Municipal Airport Fund reported a $1.2 million increase in net assets. The increase was due to a $4.3 million in contributions related to FAA grants offset by $3.2 million in operating losses. The Parking Services Fund reported a $2.9 million increase in net assets. The increase was due to net transfers of $3.4 million offset by losses of $0.5 million. The Stormwater Utility Fund reported a $0.7 million increase in net assets. The increase was principally due to $0.4 million in operating losses offset by $1.1 million in capital contributions. The Wastewater Utility Fund reported a $0.9 million decrease in net assets. The decrease was mainly due to $1.5 million in operating losses that were offset by $0.6 million in capital contributions. Other factors concerning the finances of proprietary funds can be found in the previous discussion of the City’s business-type activities. General Fund Budgetary Highlights The City’s final budget differs from the original budget in that it contains carry-forward appropriations for various programs and projects, and supplemental appropriations approved during the fiscal year. The final fiscal year 2011 budget for the General Fund was increased by $6.0 million. The primary reasons for this increase are as follows: $2.8 million increase to police, including $1.6 million for grant-funded activities, $0.7 million in fire dispatch services, and $0.4 million in carry-forward appropriations. $0.7 million increase to central services, including $0.4 million in carry-forward appropriations and $0.2 million for additional jail funding. $0.4 million increase to library, recreation, and cultural services, including $0.2 million for grant funded- activities and $0.1 million in carry-forward appropriations. $0.3 million increase in carry-forward appropriations in planning and development. These changes were funded primarily by an increase of $2.0 million in intergovernmental revenues and $3.1 million in unspent resources from the prior year. The net increase of $5.8 million in budget-basis fund balance for the year ended June 30, 2011 was a significant improvement over the projected deficit of $1.5 million in the General Fund final amended budget. Actual revenues were $1.3 million lower than budget. Although tax revenues were $1.2 million higher than anticipated, intergovernmental revenues were $1.3 million below budget projections and charges for services and licenses and permits revenues both came in $0.7 million below budget. On the expenditure side, departments underspent their budgets by a total of $8.5 million. The significant changes were in Police ($2.9 million), Fire and Emergency Medical Services ($1.7 million), Central Services ($1.6 million), and Planning and Development ($0.7 million). Economic Factors and Next Year’s Budgets and Rates During the preparation of the budget for the ensuing fiscal year, the long-term impacts of the local economy were examined in conjunction with business decisions made by the City. The following are the major assumptions used in developing the FY 2012 budget: Interest rates on investments will be 0.65%. Property tax revenue is expected to decrease 2.7% in FY 2012 due to expiration of the Library Local Option Levy. Salaries for non-represented employees and the other collectively bargained agreements will increase 1.0% - 2.1%. Health benefit rates will increase by 8.7%. PERS and OPSRP costs are expected to be 25.5% and 21.7% of payroll, respectively. 21