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CITY OF LA PORTE, TEXAS
<br /> Management's Discussion and Analysis
<br /> For the Year Ended September 30, 2010
<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 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 /> As of the end of the current fiscal year, the City of La Porte's governmental funds reported combined ending
<br /> fund balances of $40,543,819. Approximately 88% of this total amount ($35,868,993) 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 ($158,870), 2) to provide for inventories
<br /> ($135,162), 3) to pay for debt service ($3,740,380), 4) to provide for municipal court building security
<br /> ($147,915), 5) to provide for municipal court technology ($38,543), 6) to provide for park zone ($147,180), and
<br /> 7) to provide for confiscated funds ($227,605), 8) to provide for animal control ($2,914 ), 9) to provide for judicial
<br /> fund ($23,197), 10) to provide for law enforcement training ($3,406), and 11) to provide for child safety fees
<br /> ($49,654).
<br /> The actual General Fund fund balance decrease for fiscal year 2010 was $1,489,540 which is $4.9 million
<br /> higher than originally projected since revenues were higher than projected and expenditures were less than
<br /> budget. The 2010 Certificate of Obligation Fund balance increased by $5,789,393 due to bond proceeds in the
<br /> current fiscal year. The Capital Projects Fund balance increased by $499,576 due to interfund transfers for
<br /> construction of capital projects. Other governmental fund balances decreased in 2010 by $2,071,692 due to
<br /> decreased revenues and increased spending for capital projects.
<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 /> Unrestricted net assets of the respective proprietary funds are Utility- $452,909 , Airport - $338,399, La Porte
<br /> Area Water Authority - $1,956,053, Sylvan Beach Convention Center - $0, and Bay Forest Golf Course —
<br /> ($719,884). The change (decrease) in net assets of the proprietary funds in 2010 was as follows: Utility -
<br /> $627,684 , which increased due to capital contributions, Airport - ($126,453), which decreased, La Porte Area
<br /> Water Authority - $217,188, which increased due to capital contributions, Sylvan Beach Convention Center -
<br /> ($265,398), which has closed due to hurricane damage and Bay Forest Golf Course - ($402,508), which
<br /> decreased.
<br /> General Fund Budgetary Highlights — The City made revisions to the original appropriations approved by the
<br /> City Council. Overall these changes resulted in an increase from the original budget of ($135,049) or 0.4 %.
<br /> The City received more than anticipated revenues by $3.5 million as a result of an upturn in industrial district
<br /> payments, property tax and sales tax.
<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, 2010 amounts to $113,865,007 (net of accumulated depreciation). This
<br /> investment in capital assets includes land, building, equipment, improvements, infrastructure and construction in
<br /> progress.
<br /> Major capital asset events during the current fiscal year included the following:
<br /> • Construction in progress Sens Road Utilities Relocation $1.4 million.
<br /> • Construction in progress Main Street revitalization program for $1.0 million.
<br /> • Construction in progress for Sports Complex for $2.2 million.
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