FY 2008 Comprehensive Annual Financial Report

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Management's Discussion and Analysis ' _ ' The management of the City of Eugene, Oregon (City) presents this narrative overview and analysis to facilitate both a r'_ j short and along-term analysis of the financial activities of the City for the fiscal year ended June 30, 2008. This Management's Discussion and Analysis (MD&A) is based on currently known facts, decisions, and conditions that _„~ existed as of the date of the independent auditor's report. Additional information outside the scope of this analysis can .~ be found in the Letter of Transmittal. ~;~ Financial Highlights ~~ The City's total assets at June 30, 2008 increased $19.9 million from $890.8 million to $910.7 million, or 2.2% from the prior year. The primary cause for the increase in total assets is the addition of $25.4 million of capital assets in ' both the governmental and business-type activity columns, including $5.8 in fleet vehicles, $5.4 million in road and .;, ;' ~ other infrastructure improvements, and $5.1 million in stormwater and wastewater improvements. The City's total liabilities increased $2.0 million from $161.2 million to $163.2 million. The increase was largely due ~ to a $5.2 million draw on the general obligation revolving credit facility. -, ) The net assets of the City (assets less liabilities) at June 30, 2008 increased $18.0 million from $729.5 million to $747.5 million, or 2.5% from the prior year. Total net assets of $117.9 million are unrestricted. • At June 30, 2008, the City's governmental funds reported combined ending fund balances of $86.8 million, a decrease of $10.0 million in comparison to the prior year. Approximately $82.3 million is unreserved and available for spending at the government's discretion, subject to reporting fund-type limitations. • The General Fund's unreserved fund balance at the end of the current fiscal year was $30.0 million, or 26.1 % of General Fund expenditures. Overview of the Financial Statements The following discussion and analysis is intended to serve as an introduction to the City's basic financial statements and other required supplementary information. The City's basic financial statements comprise three components: 1. Government-wide financial statements 2. Fund financial statements 3. Notes to the basic financial statements Government-wide financial statements. The government-wide financial statements are designed to provide readers ~~ with a broad overview of the City's finances, in a manner similar to aprivate-sector business. 1- ~ The Statement of Net Assets presents information on all of the City's assets and liabilities, with the difference between '- ' `~ the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. ', t,_ , The Statement of Activities presents information showing how the City's net assets changed during the most recent - fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, ~'! regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some -. items that will result in cash flows in a future fiscal period. Examples of such items include earned, but uncollected '~ _' property taxes, and earned, but unused compensated absences. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all, or ~ -. a significant portion of, their costs through user fees and charges (business-type activities). ~, The governmental activities of the City include the following: • Central services • Fire and emergency medical services • Library, recreation, and cultural services • Planning and development • Police • Publicworks 15