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

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CITY OF LA PORTE, TEXAS MANAGEMENTÓS DISCUSSION AND ANALYSIS (continued) Net Investment in Capital Assets The largest portion of the CityÓs net position (57.7%) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, improvements, construction in progress and infrastructure), less any debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the CityÓs investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the assets themselves cannot be used to liquidate these liabilities. Restricted Net Position A portion of the CityÓs net position, $39.5 million or 26.8% represents resources that are subject to external restriction on how they may be used. Unrestricted Net Position The City reports an unrestricted net position of $22.9 million or 15.6%. This is an increase of $4.7 million. The change is attributed primarily to governmental activities increase in revenues related to taxes, operating grants and investment earnings and cash position. The following table provides a summary of the CityÓs operations for the year ended September 30, 2020, with comparative data total for the year ended September 30, 2019. Governmental activities increased the CityÓs net position by $14.9 million as a result of operations, and Business-type activities decreased net position by $0.8 million as a result of operations. Draft 3-12-21 10 Fiscal Year 2020 Annual Report