Preliminary Official Statement (1996)

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General Funds; Economic and Statistical Data Set forth in Appendix B hereto are summaries of financial statements for the General Fund of each Member. The General Fund is a budget unit specifically defined under California law which serves as the main financing instrument for general governmental activities in California cities,towns, counties and school districts. Also set forth in Appendix B is certain economic and statistical information pertaining to each Member. Sales Tax Revenues Sales tax revenues constitute a significant source of revenues for each of the Members. Sales taxes are collected from each business engaged in retail sales in California (except for exempt items) and distributed by the State Board of Equalization (the "SBE") to the jurisdiction where the sale took place. Estimated advance payments are made monthly for the three months of each quarter followed by clean-up payments which adjust for actual collections. Each quarter's estimate is based upon the previous year's sales tax collections, as well as general economic trends determined by the SBE. Increases in sales taxes based upon new development are not fully reflected in quarterly estimates until a full calendar year after the opening of the new development for retail business. Sales taxes collected from merchants with no permanent place of business (i.e., certain vendors, construction contractors, etc.) are accumulated to a County-wide or State-wide (for out-of-state businesses) pool and distributed to cities and counties in proportion to their collections from sales tax payers. With limited exceptions, the sales taxes imposed upon business transactions in California cities are subject to the sales tax levied statewide by the State. The California Legislature could change the transactions and items upon which the State-wide tax and the sales and use tax are imposed. Any such change or amendment could have an adverse effect on sales tax revenues in each of the Members. The Members are not aware of any proposed legislative change which could have an adverse effect on sales tax revenues. Appendix B includes a summary of taxable sales transactions for the Members since 1990. The value and volume of taxable transactions are dependent on a variety of market and economic factors. Some of these factors include the level of inflation affecting the price of goods and services, the rate of population growth in the general market area, the characteristics of the specific retail developments within a given city, the market service areas of the respective developments, mobility and disposable incomes of the consumers within the market areas, any planned and proposed retail developments existing and planned competitive retail establishments outside of a city. Assessed Valuation and Tax Collections Taxes are levied for each fiscal year on taxable real and personal property which is situated in the Member city as of the preceding January 1, at the completion of new construction or when a change in ownership occurs. For assessment and collection purposes, property is classified either as "secured," "unsecured" or "supplemental" and is listed accordingly on separate parts of the assessment roll. The "secured roll" is that part of the assessment roll containing State-assessed public utilities property and property the taxes on which are secured by a lien on real property sufficient, in the opinion of the county assessor, to secure payment of the taxes. Other property is assessed on the "unsecured roll" except properties classified as "supplemental" which include property on which construction has been completed or for which a change of ownership has occurred during the fiscal year. 17