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<br />CITY OF LA PORTE, TEXAS
<br />
<br />Management's Discussion and Analysis
<br />For the Year Ended September 30,2007
<br />
<br />FINANCIAL ANAL YSIS OF THE GOVERNMENT'S FUNoj D RAFT]
<br />
<br />Governmental funds - The focus of the City of La Porte's governmental funds is tq pWllido ;nfn="t;n ,on
<br />near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
<br />City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a
<br />government's net resources available for spending at the end of the fiscal year.
<br />
<br />As of the end of the current fiscal year, the City of La Porte's governmental funds reported combined ending
<br />fund balances of $42,690,201. Approximately 93% of this total amount ($39,811,551) constitutes unreserved
<br />fund balance. The remainder of the fund balance is reserved to indicate that it is not available for new spending
<br />because it has already been committed 1) to pay for encumbrances ($95,427), 2) to provide for inventories
<br />($83,431), 3) to pay for debt service ($1,925,756), 4) to provide for municipal court building security ($123,475),
<br />5) to provide for municipal court technology ($96,529), 6) to provide for park zone ($169,683), and 7) to provide
<br />for confiscated funds ($346,265).
<br />
<br />In the general fund, the City budgeted for an increase in the fund balance of $238,419. Due to actual expenses
<br />being less than budgeted, the actual fund balance increase for fiscal year 2007 was $2,741,943. The 2007
<br />Certificate of Obligation Fund balance increased by $8,048,780 due to issues of bonds in the current fiscal year.
<br />The 2005 General Obligation Fund balance decreased by $6,555,527 due to the expenditure of bond proceeds.
<br />Other Governmental fund balances increased in 2007 by $1,158,071 due to increased revenues and other
<br />sources of financing.
<br />
<br />Proprietary funds - The City's proprietary fund statements provide the same type of information found in the
<br />government-wide financial statements, but in more detail.
<br />
<br />Unrestricted net assets of the respective proprietary funds are Utility - $1,213,407, Airport - $210,211, La Porte
<br />Area Water Authority - $1,791,280, Sylvan Beach Convention Center - $158,144, and Bay Forest Golf Course-
<br />($77,541). The change (decrease) in net assets of the proprietary funds in 2007 was as follows: Utility-
<br />($970,353), Airport - $145,769, La Porte Area Water Authority - $469,531, Sylvan Beach Convention Center -
<br />$8,915, and Bay Forest Golf Course - $83,050.
<br />
<br />General Fund Budgetary Highlights - The City made revisions to the original appropriations approved by the
<br />City Council. Overall these changes resulted in a decrease from the original budget of 2% or $580,094.
<br />
<br />Variances noted in the general fund are due to City Council appropriating additional capital projects, increased
<br />spending for public safety projects and salary savings.
<br />
<br />CAPITAL ASSETS AND DEBT ADMIN/STRA TlON
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<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, 2007 amounts to $90,416,286 (net of accumulated depreciation). This investment
<br />in capital assets includes land, building, equipment, improvements, infrastructure and construction in progress.
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