03-26-12 Fiscal Affairs Committee

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CITY OF LA PORTE, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Total expenses increased for fiscal year 2011 in comparison to fiscal year 2010. General government expenses increased by $2.0 million and public works increased by $1.8 million from the prior year. The increase is mainly due to combining Bay Forest Golf Course Fund and the Technology Fund with the General Fund. Business-type Activities. Revenues without transfers in the business-type activities totaled $11.3 million, a $2.2 million increase from the prior year. This increase is mainly due to an increase in water and sewer revenues due to drought conditions. A comparison between expenses and program revenues (charges for services) relating to Utility operations follows. Expenses and Program Revenues -Business-type Activities $7,000 $6,000 Expenses $5,000 Program Revenues $4,000 $3,000 $2,000 $1,000 $- Water ServicesSewer services Financial Analysis of the Government’s Funds The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of$42.5million, an increase of $2.0 from the prior year. This increase is due to a sale of City owned property. Governmental Funds. The focus of the City’s governmental funds is to provide information on near- term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. The General fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned increase fund balance of the general fund was $19.1 million, an of $7.2 million compared to last year. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 57% of total general fund expenditures and total fund balance represents 58% of the same. The Debt Service fund had a total fund balance of approximately $3.1 million, all of which is reserved for the payment of debt service. The net decrease in fund balance from the prior year of $4,806 was due to more debt service payments made than revenues collected. The Capital Projects Fund experienced a decrease in fund balance in the amount of $101,995 . This was a planned decrease as the City utilized bond funds to construct and acquire various capital assets. 8