03-11-13 Fiscal Affairs Committee

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CITY OF LA PORTE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Construction in progress at year-end represents ongoing projects; to include various water and sewer projects. Additional information on capital asset activity can be found in note 5 to the financial statements. Long-term Debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $42.8$38.8 million. Of this amount, million is backed by the full faith and credit of the City, and the remainder represents revenue bonds secured solely by specified revenue sources. The City’s total debt decreased by approximately $2.4 million during the fiscal year. They key factor in this decrease was payment of debt. The City of La Porte maintains and “Aa2”, “AA”, and “AA-“by Moody’s, Standard and Poor’s and Fitch respectively for general obligation debt. The revenue bonds have been rated “A2”, “A”, “NR” by Moody’s, Standard and Poor’s and Fitch respectively. Additional information on long-term debt activity can be found in note 6 to the financial statements. Economic Factors and Next Year’s Budgets and Rates The unemployment rate for the City of La Porte is currently 6.3 percent which is a decrease from the rate of 9.0 percent a year ago. This is less than the state’s average unemployment rate of 6.8 percent which is less than the national average of 7.8 percent. During the upcoming year, the City will closely monitor the volatility in the housing market. Although our area has not been adversely affected by home foreclosures, we will observe future economic changes. Total assessed value for all residential and commercial property in the City of La Porte exceeded $2.3 billion for fiscal year 2012. The trend for total assessed values has been steadily increasing each year with an average annual increase of 5 percent over the past five years. Assessed property values trends (in billions): Åu Åu Åu Åu Åu Å u Å u Å u 10