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City
Services
Finance Department
City Finances
Financial highlights for the fiscal
year ended
June 30, 2004
are outlined below and shown in more detail in the
accompanying tables.
Financial Highlights
The City’s governmental activities total assets exceeded
liabilities (net assets) at the close of the fiscal year
by $10,512,673, an increase of $1,207,720 over 2003. Of
this amount, $1,949,283 is in unrestricted net assets,
which is available to meet the City’s ongoing financial
obligations.
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CITY OF
SONORA
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NET ASSETS
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JUNE 30,
2004 AND 2003
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2004
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2003
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Current and other
assets
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$ 5,934,811
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$ 5,426,617
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Capital assets
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7,400,428
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6,861,359
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Total assets
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13,335,239
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12,287,976
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Long-term liabilities
outstanding
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1,838,583
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1,960,276
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Other liabilities
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983,983
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1,022,747
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Total
liabilities
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2,822,566
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2,983,023
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Net assets:
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Invested in capital
assets, net of related debt
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5,561,845
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4,901,083
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Restricted
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3,001,545
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2,410,877
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Unrestricted
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1,949,283
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1,992,993
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Total net assets
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$ 10,512,673
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$ 9,304,953
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The statement of net assets
presents information on all the City’s assets and
liabilities, with the difference between the two
reported as net assets. Over time, increases or
decreases in net assets may serve as one indicator of
whether the City’s financial position is improving or
deteriorating.
General and program revenues exceeded expenses
by $1,207,720, an increase of $177,657 or 17%. City
program expenses totaled $5,106,661 for 2004. Public
safety (police and fire protection) costs comprised
$2,449,353 or 48% of this amount.
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CITY OF
SONORA
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STATEMENT OF
ACTIVITIES
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FOR THE YEARS ENDED
JUNE 30,
2004 AND 2003
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Governmental
Activities
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2004
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2003
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Revenues:
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Program Revenues:
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Charges for
services
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$ 1,299,768
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$ 1,110,426
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Operating grants
and contributions
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219,650
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232,607
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Capital Grants & Contributions
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638,335
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504,282
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General Revenues:
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Property tax
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1,097,981
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925,324
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Sales tax
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2,293,154
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2,198,300
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Motor vehicle tax
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207,703
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266,583
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Transient lodging
tax
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202,790
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200,559
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Motor fuel tax
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103,221
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101,519
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Other taxes
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106,945
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84,077
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Investment earnings
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144,834
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160,050
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Total revenues
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$ 6,314,381
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$ 5,783,727
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Expenses:
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General government
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783,465
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786,320
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Public safety
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2,449,353
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2,259,883
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Public works
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854,144
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855,726
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Community
development (building & planning)
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809,787
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627,209
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Culture and leisure
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93,608
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95,902
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Interest on
long-term debt
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116,304
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128,624
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Total expenses
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$ 5,106,661
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$ 4,753,664
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Increase in net
assets
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$ 1,207,720
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$ 1,030,063
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The statement of
activities presents information showing how the
City’s net assets changed in the most recent fiscal
year. All changes of net assets are reported as soon as
the underlying event giving rise to the change occurs.
Therefore, revenues and expenses are reported on this
statement for some items that will result in cash flows
in future fiscal periods.
The City’s General
Fund ended the year with a fund balance of $2,576,767,
an increase of $150,902 from the previous year. General
Fund revenues exceeded expenditures by $50,902 as a
result of strong building permit activity and increased
property tax collections offset by increases in
departmental spending by Public Safety and Public
Works. General Fund expenditures totaled $3,851,825.
Police and fire protection costs were $1,593,763 or 42%
and $573,589 or 15%, respectively, of total General Fund
expenditures.

Economic Factors and Next Year's Budget
In preparing the budget for fiscal year
2004-2005, City management looked at the following
economic factors:
The State of
California ’s adopted
budget for fiscal year 2004-2005 incorporates agreed
upon “contributions” from cities, counties, special
districts, and redevelopment agencies. In exchange for
these contributions in fiscal years 2004-2005 and
2005-2006, Governor Schwarzenegger agreed to support a
state-wide measure on the November, 2004 ballot that
will severely restrict the State’s ability to shift
local government revenues in future years. While this
measure was resoundingly approved by
California
voters, local governments are currently facing loss of
revenue from the sources listed below.
¨
Sales tax - the State
has adopted legislation that will exchange a portion of
the City’s sales tax revenue for property tax revenue.
Different distribution dates of these two types of
revenue will adversely affect the City’s cash flow and
interest earnings.
¨
Vehicle license
fees – the City’s allocation of motor vehicle license
fees collected by the State will be reduced in fiscal
year 2004–2005 by $94,269 in accordance with the
agreement between Governor Schwarzenegger and the League
of California Cities.
¨
Property tax
revenue shifts to the Education Relief Augmentation Fund
– the State continues to transfer a portion of City and
Redevelopment Agency property tax revenue to fund
education.
A strong local economy continues to
make sales tax revenue a reliable source of income for
the City.
Increasing market values of existing homes and
continuing demand for new housing has resulted in higher
than average building permit activity and related
revenue.
·
Rising property tax assessed values, combined with a
strong housing market are providing the City with
increasing property tax revenue.
·
The City proposed a city-wide Transaction and Use Tax
increase of ˝ %. The ballot measure was brought before
the City’s registered voters in a Special Election with
a mail-in ballot on
August 31, 2004
. The measure was approved with a 73.1% “yes” vote,
providing additional revenue to be used to enhance
police, fire, and public works services.
For Fiscal year 2004-2005, the
City’s general fund revenues are projected to increase
by $161,200. General fund expenditures are budgeted to
increase by $68,350. Both amounts represent a 4%
increase over the prior year’s budget. Total projected
revenues and expenses for the upcoming fiscal year are
budgeted at $3,859,100 and $3,803,800, respectively.
Due to the continuing shift of revenue from the General
Fund by the State of
California
, City management has taken a position of conservative
revenue projection and a reduction of 5% for all General
Fund department expenditures from the prior year. The
adopted fiscal year 2004-2005 General Fund budget does
not include funding for any new positions or the
purchase of capital items.
Karen Stark, Finance Director
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