Preliminary Financial Report FY17

2018 Financial Report

2017 Preliminary Financial Report

A first look at the City’s financial performance in the fiscal year ending June 30, 2017

 

In May 2016, the City Council approved a budget of $8.8 billion for the fiscal year from July 1, 2016 through June 30, 2017.

The Preliminary Financial Report provides data and analysis of the City’s revenues and expenditures for the 2016-17 fiscal year. It details where the City’s budgeted funds came from and how they were spent, in addition to information about the City’s debt, reserves, and more.

To learn more, you can read the report, explore the data through our interactive data visualizations, or download the data and take a look for yourself.

The Report

One of the City Controller’s main responsibilities is to analyze and report on the City’s finances. The reports produced by the Controller serve to inform City officials and the general public about the City’s financial activities and financial status. They also aim to initiate meaningful reflection and debate about the City’s fiscal management.

The Preliminary Financial Report, made available each fall after the City’s books are closed, is the first of these reports. It provides information on how the City spent its funds over the past fiscal year, featuring data and analysis regarding the City’s revenues and expenditures, the Reserve Fund, the Budget Stabilization Fund, and the City’s bonded indebtedness.

More complete and detailed information, presented in accordance with Generally Accepted Accounting Practices (GAAP), will be published in the Comprehensive Annual Financial Report (CAFR) later this year. The Controller also publishes the Community Financial Report, which aims to make the information in the CAFR more accessible to the general public.

Data

Revenues

In fiscal year 2017, the City’s General Fund revenues grew by 6% compared to the previous year. Budgeted Special Fund revenues grew by 3.6%. This 4% overall growth was led by all-time highs in Property Tax, Business Tax, Sales Tax, Transient Occupancy Tax, and building permit fees.

View our interactive data visualization to explore the relative size of the City’s revenue sources and their growth over the past ten years.

 

Expenditures

The City’s expenditures grew by 5.2% in fiscal year 2017. This was due in large part to salary increases and a spike in payouts for legal settlements and decisions. City employee health benefit subsidies increased by 6.4%, compared to a nationwide average of more than 20%. Additionally, the City’s debt service fell to its lowest annual total since 2004.

Our interactive data visualization compares the expenditures of the City’s different departments, as well as non-departmental expenditures, over the past ten years. View total expenditures, salaries, other expenditures, descriptions of each item, and the change of each item over time.

 

Reserve Fund and Budget Stabilization Fund

It is crucial that the City build up reserve funds during years of strong growth in order to prepare for future downturns. From 2009 to 2015, the City built its reserves (including the Reserve Fund and the Budget Stabilization Fund) up to almost 10% of the adopted General Fund Budget, up from 3.4%. Since then, the reserves have fallen to less than 8% of the General Fund.

 

Reserve Fund

The Reserve Fund is established to ensure that funds are available for unanticipated expenditures and revenue shortfalls in the General Fund. The City’s Reserve Fund Policy states that the Reserve Fund should be maintained at 5% of the General Fund budget. On July 1, 2017, the Reserve Fund had a cash balance of $354.5 million, 6.08% of 2017-18 budgeted General Fund revenue.

 

Budget Stabilization Fund

The Budget Stabilization Fund (BSF) was added to the City Charter in 2011. The purpose of the BSF is to set aside funds when revenue projections are exceeded to help smooth out years when revenue is stagnant or is in decline. In fiscal year 2017, the BSF grew slightly to about $95 million, but stayed about flat as a percentage of General Fund revenues.

Click the chart on the left to view the performance of the Reserve Fund and Budget Stabilization Fund, both in dollar terms and as a percentage of budgeted General Fund revenues. You can also download the data in the Data section below.

 

Debt

The City’s Debt Management Policy establishes guidelines for the structure and management of the City’s debt obligations. These guidelines include a non-voter-approved debt service cap of 6% and a total debt service cap of 15% as a percent of General Fund revenues.

The City’s total indebtedness and debt service obligations have been on a downward trend since fiscal year 2012, reflecting lack of any new General Obligation Bond (GOB) issuances and the refinancing of higher rate bonds at the prevailing low interest rates. Going forward, the opportunity to lower costs further will be limited, as interest rates will likely begin to rise and the City begins issuing the GOB debt authorized by Measure HHH. View the data by clicking on the link to the left, or download it to take a look yourself by clicking on the link in the Data section below.