City of Rancho Cucamonga Fiscal Year 2012/13 Operating Budget Midyear Budget Update Presented to the City Council February 20, 2013

Operating Budget Comprised of: – City General Fund – Library Fund – Fire District Funds Midyear Budget Update covers activity through December 31, 2012

Factors Influencing Operating Budget Starting to recover from past revenue declines Slow and gradual revenue growth continuing to occur – Unemployment levels continue to improve inside Rancho Cucamonga at a faster level and are more favorable than the County overall – Housing market continues to recover with prices increasing, supply at record lows, and strong demand

General Fund Snapshot

Top Seven Revenues Account for approximately 88% of total General Fund revenues

Top Seven Revenues (cont’d) Sales tax – Due to the “Triple Flip,” we only receive 75% of our base revenues from State allocations – Remaining 25% is remitted by County in February and June (subsequent to midyear) – Revenues are projected to slightly exceed budget by fiscal year end – Although things are slowly improving, the City is still 5.2% below the pre-economic downturn sales tax revenues in FY 2007/08

Top Seven Revenues (cont’d) Vehicle License Fees (VLF) – Have received $91,710 of VLF as of midyear – No further revenue will be received due to State’s prior year redirection of VLF to COPS grant program (SB89) – League of California Cities challenged this action in court; decision expected in next few months – Property tax-in-lieu of VLF is received after midyear; anticipate revenues to exceed budget by $105,340

Top Seven Revenues (cont’d) Franchise Fees – Largest components received in April – Other franchise fees are in line with budget Property Tax – Collections are slightly higher than at this time last year due to the earlier than anticipated payment of the City’s share of the County Redevelopment Property Tax Trust Fund (RPTTF) distribution – Revenues should be in line with budget by fiscal year end

Top Seven Revenues (cont’d) Development Fees – Coming in as anticipated, with collection percentages ranging from 51% to 54% Business Licenses – On track with projections Transient Occupancy Taxes – Performing consistently with projections – Slightly higher than at this time last year

Departmental Expenditures

Departmental Expenditures (cont’d) Generally on target as of midyear Factors contributing to slightly higher percentage expended/encumbered: – Annual contracts fully encumbered at beginning of year – Certain overhead cost allocations completely allocated at beginning of year Central services departments (in italics above) have a slightly lower percentage expended/encumbered as of midyear due to full allocation of City’s Cost Allocation Plan (CAP).

Departmental Expenditures (cont’d) – CAP allocation results in a net reduction to the central services departments’ General Fund budgets – These costs have been allocated to non-General Fund sources Potential savings by end of fiscal year – No booking fees charged by County – Anticipated reduction in the Property Tax Administrative Fee (PTAF) due to favorable outcome of recent litigation

Library Fund Snapshot

Library Fund Snapshot (continued) Property tax makes up approximately 84% of the Library’s budget – Includes a pass-through from the County RPTTF received twice per fiscal year (previously distributed by the former Redevelopment Agency) Pass-through represents 32% of property tax revenue – Also includes additional post-RDA property tax revenues due to elimination of former RDA (4% of property tax revenue) Revenues and expenditures should be in line with budget as of fiscal year end

Fire Funds Snapshot Includes General Fund, CFD 85-1 and CFD 88-1

Fire Funds Snapshot (continued) Property tax makes up approximately 91% of the Fire District’s budget (82% in prior year) – Includes post-RDA property tax revenues due to elimination of RDA – In the prior year, these revenues were transferred directly from the RDA to the Fire District as an operating transfer to fund fire protection services – Now they are distributed from the County’s RPTTF and are categorized as property tax revenues Fire District revenues and expenditures are on track and within budget as of midyear.

Summary Overall, the City’s operating budget is performing well as of midyear Generally, revenues are on track with, or slightly ahead of, projections and expenditures are on track with, or slightly below, historical norms Slow economic recovery is expected to continue; City will continue to maintain fiscal prudence