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<br />LA PORTE AREA WATER SUPPLY <br /> <br />MANAGEMENT'S DISCUSSION AND ANALYSIS <br /> <br />YEAR ENDED SEPTEMBER 30, 2009 <br /> <br />As management of the La Porte Area Water Authority (the "Authority"), we offer readers of the <br />Authority's financial statements this narrative overview and analysis of the financial activities of the <br />Authority for the fiscal year ended September 30, 2009. <br /> <br />FINANCIAL IDGHLIGHTS <br /> <br />· The assets of the La Porte Area Water Authority exceeded its liabilities at the close of <br />the most recent fiscal year by $6,407,496 (net assets). Of this amount, $1,621,835, <br />unrestricted net assets, may be used to meet the government's ongoing obligations to <br />citizens and creditors in accordance with the Authority's fund designation and fund <br />policies. <br /> <br />· The government's total net assets increased by $233,047. <br /> <br />· The Authority's total bonded debt decreased by $505,000 during the current fiscal <br />year. <br /> <br />OVERVIEW OF THE FINANCIAL STATEMENTS <br /> <br />This discussion and analysis is intended to serve as an introduction of the Authority's basic financial <br />statements. The La Porte Area Water Authority is considered a component unit of the City of La Porte, <br />Texas since the Authority provides approximately 86% of its services for the exclusive benefit of the <br />City of La Porte. The Authority's basic financial statements are comprised of the fund financial <br />statements and notes to the financial statements. This report also contains other supplementary <br />information in addition to the basic financial statements themselves. <br /> <br />Fund Financial Statements. The operations of the Authority are recorded in a proprietary (Enterprise) <br />Fund. A fund is a grouping of related accounts that is used to maintain control over resources that have <br />been segregated for specific activities or objectives. The Authority, like other state and local <br />governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal <br />requirements. <br /> <br />The statement of net assets presents information on all the Authority's assets and liabilities, with the <br />difference between the two reported as net assets. Over time, increases or decreases in net assets may <br />serve as a useful indicator of whether the financial position of the Authority is improving or <br />deteriorating. <br /> <br />2 <br />