03-22-21 Regular Meeting of the La Porte City Council

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CITY OF LA PORTE, TEXAS MANAGEMENTÓS DISCUSSION AND ANALYSIS As management of the City of La Porte, we offer readers of the City of La PorteÓs financial statements this narrative overview and analysis of the financial activities of the City of La Porte for the fiscal year ended September 30, 2020. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i-vi of this report. FINANCIAL HIGHLIGHTS ¤ The assets and deferred outflows of resources of the City of La Porte exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $147.4 million (net position). Of this amount, $39.5 million is restricted for special purposes. The remaining balance is unrestricted net position, $22.9 million, which can be used to meet the CityÓs ongoing obligations to residents and creditors. ¤ Net position increased by $14.1 million as a result of operations. ¤ The City of La PorteÓs total expenses were $72.1 million. Program revenues of $21.4 million reduced the net cost of the CityÓs functions to be financed from the CityÓs general revenues to $50.7 million. ¤ The City of La PorteÓs total long-term liabilities and debt decreased by $2.9 million, or 3%, during the current fiscal year. This due primarily to the decrease in bonded debt and pension liability. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City of La PorteÓs basic financial statements. The CityÓs basic financial statements are comprised of three components: (1) government-wide financial statements, (2) fund financial statements and (3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. GOVERNMENT-WIDE STATEMENTS The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Position and the Statement of Activities, which are the government-wide statements, report information about the City as a whole and about its activities in a way that helps answer the question of whether the City is better off this year as compared to last year. These statements include all assets and liabilities and are presented on the accrual basis of accounting. All current year revenues and expenses are taken into account regardless of when the cash is received or paid. The Statement of Net Position presents information on all of the City of La PorteÓs assets, deferred outflows, liabilities and deferred inflows with the difference between the three reported as net position. Over time, deferred outflows, increases and decreases in net position may serve as a useful indicator of whether the financial position of the City of La Porte is improving or deteriorating. The Statement of Activities presents information showing how the governmentÓs net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation and sick leave). Draft 3-12-21 7 Fiscal Year 2020 Annual Report