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CITY OF LA PORTE, TEXAS
<br />Managements Discussion and Analysis
<br />For the Year Ended September 30, 2004
<br />FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
<br />Governmental funds — The focus of the City of La Porte's governmental funds is to provide information on
<br />near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing
<br />the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of
<br />a government's net resources available for spending at the end of the fiscal year.
<br />' At of the end of the current fiscal year, the City of La Porte's governmental funds reported combined ending
<br />fund balances of $23,143,855. Approximately 67% of this total amount ($15,471,748) constitutes unreserved
<br />fund balance. The remainder of the fund balance is reserved to indicate that it is not available for new
<br />' spending because it has already been committed 1) to pay for encumbrances ($255,876), 2) to provide for
<br />inventories ($69,136), . 3) to pay for debt service ($1,797,213) and 4) to provide for capital projects
<br />construction ($5,549,882).
<br />1 In the general fund, the City budgeted for a decrease in the fund balance of $3,126,590, which was the result
<br />of a shortfall in budgeted revenues and other resources. Due to actual revenues being more than budgeted
<br />and actual expenses being less than budgeted, the actual fund balance decrease for fiscal year 2004 was
<br />$285,895. Debt Service fund balance increased in 2004 by $207,603 and was primarily due to higher than
<br />planned property tax revenue. Capital Improvements fund balance decreased in 2004 by $1,228,062 due to
<br />capital outlay expenditures and transfers to other funds. The 2002 General Obligation Bonds fund balance
<br />decreased in 2004 by $1,452,432 for capital projects expenditures and Other Governmental fund balances
<br />' decreased in 2004 by $444,553.
<br />Proprietary funds — The City's proprietary fund statements provide the same type of information found in
<br />' the government -wide financial statements, but in more detail. Unrestricted net assets of the respective proprietary funds are Utility - - $4,114,918, Airport $367,874,
<br />La Porte Area Water Authority - $193,959, Sylvan Beach Convention Center - $110,116, and Bay Forest Golf
<br />' Course - $(77,499). The change (decrease) in net assets of the proprietary funds in 2004 was as follows:
<br />Utility - $(319,008), Airport - $(114,109), La Porte Area Water Authority - $(98,722), Sylvan Beach
<br />Convention Center- $(19,285), and Bay Forest Golf Course - $(298,756).
<br />' General Fund Budgetary Highlights — The City made revisions to the original appropriations approved by
<br />the City Council. Overall these changes resulted in an increase from the original budget of 0.3% or $73,162.
<br />' The City's budgeted revenue increased .2% as a result of revised revenue projections for interest and
<br />miscellaneous revenue. However, interest earnings were down because of a slow economy and declining
<br />interest rates.
<br />CAPITAL ASSETS AND DEBT ADMINISTRATION
<br />Capital Assets - The City of La Porte's investment in capital assets for its governmental and business -type
<br />activities as of September 30, 200 amounts to $74,899,113 (net of accumulated depreciation). This
<br />investment in capital assets includes land, building, equipment, improvements, infrastructure and
<br />construction in progress.
<br />rMajor capital asset events during the current fiscal year included the following:
<br />e Construction in Progress for improvements to the wastewater treatment plant.
<br />• Infiltration and inflow reduction program for the public works department.
<br />• Approximately $650,000 in fleet replacement.
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