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<br />CITY OF LA PORTE, TEXAS
<br />
<br />Management's Discussion and Analysis
<br />For the Year Ended September 30, 2008
<br />
<br />FINANCIAL ANAL YS/S OF THE GOVERNMENT'S FUNDS
<br />
<br />Governmental funds - The focus of the City of La Porte's governmental funds is to provide information on
<br />near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
<br />City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a
<br />government's net resources available for spending at the end of the fiscal year.
<br />
<br />As of the end of the current fiscal year, the City of La Porte's governmental funds reported combined ending
<br />fund balances of $43,228,403. Approximately 92% of this total amount ($39,845,794) constitutes unreserved
<br />fund balance. The remainder of the fund balance is reserved to indicate that it is not available for new spending
<br />because it has already been committed 1) to pay for encumbrances ($498,822), 2) to provide for inventories
<br />($104,937), 3) to pay for debt service ($1,999,842), 4) to provide for municipal court building security
<br />($153,244),5) to provide for municipal court technology ($62,703),6) to provide for park zone ($161,272), and
<br />7) to provide for confiscated funds ($395,315), 8) to provide for animal control ($729), 9) to provide for judicial
<br />fund ($5,745).
<br />
<br />The actual fund balance increase for fiscal year 2008 was $90,379. This is because of increased revenue
<br />collections and decreased expenditures. The 2007 Certificate of Obligation Fund balance decreased by
<br />($3,079,664) due to expenditures of bond proceeds in the current fiscal year. The Grant Fund balance
<br />increased by $874,466 due to the accrual of grant funds. The Capital Projects Fund balance increased by
<br />$3,783,171 due to interfund transfers for construction of a municipal court building and Sylvan Beach
<br />renourishment program. Other governmental fund balances decreased in 2008 by ($1,130,147) due to
<br />decreased revenues and other sources of financing.
<br />
<br />Proprietary funds - The City's proprietary fund statements provide the same type of information found in the
<br />government-wide financial statements, but in more detail.
<br />
<br />Unrestricted net assets of the respective proprietary funds are Utility - $2,046,959, Airport - $261,693, La Porte
<br />Area Water Authority - $1,536,785, Sylvan Beach Convention Center - $182,729, and Bay Forest Golf Course-
<br />($228,805). The change (decrease) in net assets of the proprietary funds in 2007 was as follows: Utility-
<br />$5,026,252 , Airport - $1,135,620, La Porte Area Water Authority - $368,892, Sylvan Beach Convention Center -
<br />$9,713, and Bay Forest Golf Course - ($31,440).
<br />
<br />General Fund Budgetary Highlights - The City made revisions to the original appropriations approved by the
<br />City Council. Overall these changes resulted in a decrease from the original budget of 5% or $1,375,316. The
<br />City increased its anticipated revenues by $2.0 million. This revenue included an upturn in industrial district
<br />payments, sales tax and property tax.
<br />
<br />Variances noted in the general fund are due to City Council appropriating additional capital projects, increased
<br />spending for public safety projects, salary savings and anticipated lease of property.
<br />
<br />CAPITAL ASSETS AND DEBT ADMINISTRA TlON
<br />
<br />Capital Assets - The City of La Porte's investment in capital assets for its governmental and business-type
<br />activities as of September 30,2008 amounts to $93,949,868 (net of accumulated depreciation). This investment
<br />in capital assets includes land, building, equipment, improvements, infrastructure and construction in progress.
<br />
<br />Major capital asset events during the current fiscal year included the following:
<br />
<br />· Construction in progress Waste Water Treatment Plant improvements $2.8 million.
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