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<br />Management Discussion and Analysis - Continued
<br />May 4, 2006
<br />
<br />Government-wide Financial Analysis
<br />
<br />As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City,
<br />assets exceeded liabilities by $17,470,621 at the close of the most recent fiscal year.
<br />
<br />By far, the largest portion of the City's net assets (46.3 percent) reflects its investment in capital assets (e.g., land, buildings,
<br />machinery and equipment), less any related debt used to acquire those assets thatare still outstanding. The City uses these capital
<br />assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's
<br />investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must
<br />be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
<br />
<br /> Summary of Net Assets
<br />Governmental Activities Business-type Activities
<br /> Increase Increase
<br />2005 2004 (Decrease) 2005 2004 (Decrease)
<br />$ 6,864,839 $ 7,637,372 $ (772,533) $ 2,851,010 $ 3,501,475 $ (650,465)
<br />7,946,343 8,327,923 (381,580) 6,195,759 5,770,663 425,096
<br />14,811,182 15,965,295 (1,154,113) 9,046,769 9,272,138 (225,369)
<br />6,083,229 5,729,419 353,810 7,608 405,648 (398,040)
<br />266,437 501,294 (234,857) 30,056 102,222 (72,166)
<br />6,349,666 6,230,713 118,953 37,664 507,870 (470,206)
<br />
<br />Assets
<br />Current and other assets
<br />Capital assets
<br />
<br />Total assets
<br />
<br />Liabilities
<br />Noncurrent liabilities outstanding
<br />Other liabilities
<br />
<br />Total liabilities
<br />
<br />Net assets
<br />Invested in capital assets,
<br />net of related debt
<br />Restricted for
<br />Future expansion
<br />Debt service
<br />Unrestricted
<br />
<br />825,096
<br />
<br />(580,259)
<br />
<br />$ 244,837
<br />
<br />Total net assets
<br />
<br />The decrease in current and other assets in governmental activities is attributed to the prepayment of the GO Improvement Bonds,
<br />Series 1998 to reduce interest cost. The decrease in current and other assets as well as the increase in capital assets in business-
<br />type activities is attnbuted to the completion of the construction to the water tower.
<br />
<br />The increase in non-current liabilities outstanding in the governmental activities is attributed to the debt for the Joint Police
<br />Station. The decrease in non-current liabilities outstanding in business-type activities is attributed to prepayment of the GO
<br />Sewer and Water Revenue Bonds, Series 1998 to reduce interest cost.
<br />
<br />An additional portion of the City's net assets (24.2 percent) represents resources that are subject to external restrictions on how
<br />they may be used. The remaining balance of unrestricted net assets ($5,089,023) may be used to meet the City's ongoing
<br />obligations to citizens and creditors.
<br />
<br />At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the
<br />City as a whole, as well as for its separate governmental and business-type activities.
<br />
<br />-v-
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