MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 20O9

 (note: The following is a hand transcription of a document in my possession. I’ll be happy to fix any typos or mistakes you might happen to find. However, if you want to complain about differences in style, formatting “bolding” and spacing-{and you know who YOU are}BITE ME! Plus-this is a work in progress. Currently, I am up to page 5 of 7 pages worth of stuff. I’m doing this on my own %#$@ time so if you want more and I’m not done yet-get off your duff, go to City Hall and ask for a copy of it for yourself)

As management of the city of Livingston, we offer readers of the of the City of Livingston’s financial statements this narrative overview and analysis of the financial activities of the City of Livingston (the City) for the fiscal year ended June 30, 2009.

FINANCIAL HIGHLIGHTS

·        Net assets from governmental activities decreased $1,120,414 during fiscal year 2009. Net assets from business-type activities decreased $941,902. Total net assets from governmental activities and business-type activities decreased $2,062,316 during fiscal year 2009. The total net assets for both governmental activities and business-type activities decreased from $30,382,312 in the prior year to a net asset balance of $28,319,996 during fiscal year 2009.

·        The General Fund is the primary operating fund of the City of Livingston. The fund balance decreased $97,535 from $3,313,905 to $3,216,370 on June 30 2009. The General Fund Balance consists of a $1,171,705 loan to the Livingston Redevelopment Agency, $19,066 in non-current receivables and $2,025,599 in unreserved and undesignated fund balance.

·        The City had total long-term debt at June 30, 2009 of $10,433,767. The City debt decreased $236,805 during fiscal year 2009.

·        Total cash and investment balances across all funds on June 30, 2009 was $5,153,446, including $1,194,424 in restricted cash balances and $3,959,022 in unrestricted cash balances.

·        The Water Enterprise Fund had a net operating loss of $454,506. Net assets for the Water Enterprise Fund at June 30, 2009 was $4,582,449.

·        The Water Enterprise Fund had a development impact fee cash and investment balance of $1,282,574 and an unrestricted negative cash and investment balance of $1,294,854 for operations as of June 30, 2009.

·        The Domestic Wastewater Enterprise Fund had a net operating loss of $108,439. Net assets for the Domestic Wastewater Enterprise Fund at June 30, 2009 was $4,352,383.

·        The Domestic Wastewater Fund had a restricted negative cash and investment balance of $88,150 and an unrestricted negative cash and investment balance of $892,378 as of June 30, 2009.

·        The Sanitation Enterprise Fund had a net operating loss of $146,494. Net assets for the Sanitation Enterprise Fund at June 30, 2009 was a negative $593,363.

·        The Sanitation Enterprise Fund had an unrestricted negative cash and investment balance of $640,806 from operations on June 30, 2009.

·        The ending fund balances for the fiscal year ended June 30, 2009 in the Community Redevelopment Fund and the Low-Moderate Income Housing Fund of the Livingston Redevelopment Agency were a negative $566,385 and $615,190 respectively.

·        The City spent $916,095 for Street Rehabilitation including $387,705 in grant funds received from the California Department of Transportation (Caltrans) Proposition 1B funds, $219,029 from Transportation Development (TDA) funds, $187,211 from Regional Surface Transportation Program (RSTP) funds, and $122,150 from Proposition 42 Traffic Congestion Relief funds.

·        The City spent a total of $77,854 in grant funds to construct side walks including $43,223 received from the California department of Transportation (Caltrans) and $34,631 from the Federal Highways Administration Safe Routes to Schools programs.

·        During this year, the City spent $61,713 in Transportation Development Act (TDA) funds for paving the dirt alleys.

·        The City spent $455,395 in water development impact fees in conjunction with the Proposition 13 State Grant to install waterlines in the City.

·        The City spent $52,210 to purchase equipment for a City Council Televising System.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the City’s financial statements. The financial statements presented herein included all of the activities of the City of Livingston using the integrated approach as prescribed by Governmental Accounting Standards Board (GSAB) statement No. 34. The City’s financial statements are comprised of three components: (1) Governmental-Wide Financial statements, (2) Fund Financial Statements, and (3) notes to the financial statements. This report also contains other supplementary information in addition to the financial statements themselves.

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 a private-sector business. The statements present the financial picture of the City from the economic resources measurement focus using the accrual basis of accounting. They present governmental activities and business-type activities separately.

Fund Financial Statements – The Fund Financial Statements include statements for governmental, proprietary and fiduciary activities. The governmental activities are prepared using the current financial resources measurement focus and modified accrual basis of accounting. The proprietary, or business-type, activities are prepared using the economic resources measurement focus and the accrual basis of accounting. The fiduciary activities are Agency Funds, which only report a balance sheet and do not have a measurement focus. Reconciliation’s of the Fund Financial Statements to the Government-Wide Financial Statements are provided to explain the differences created by the integrated approach.

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 a private sector business. The Statement of Net Assets and the Statement of Activities and Changes in Net Assets report information about the City as a whole and about its activities. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenue and expenses are taken into account regardless of when cash is received or paid.

Statement of Net Assets – 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.

Statement of Activities and Changes in net Assets – the statement of Activities and Changes in Net Assets presents information that shows how the City’s net assets changed during the fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occur, 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.

Both 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). Governmental activities include administration, public safety, community development, building inspection, building and grounds maintenance, streets, transportation and debt service. The business-type activities of the City include water, sanitation and waste water services.

The government-Wide financial Statements include not only the City itself (known as the primary government), but also the city of Livingston Redevelopment Agency. This is a legally separate entity for which the City is financially accountable. Financial information for the City of Livingston Redevelopment Agency is reported separately from the financial information presented for the primary government itself. Government-wide financial Statements can be found on pages 9 and 10 of this report.

FUND FINANCIAL STATEMENTS

The Fund Financial statements provide detailed information about the most significant funds-not the City as a whole. A fund is a grouping of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Some funds are required to be established by law and bond covenants. However, management establishes other funds to help control and manage money for particular purposes, or to show that it is meeting legal responsibilities for using certain taxes, grants and other money.

Governmental Funds – governmental Funds focus on how money flows into and out of those funds and the balances left at the year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The Governmental Fund statements provide a detailed short-term view of the city’s general governmental operations and the basic services it provides. Governmental Fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the general governmental programs.

Governmental Funds are used to account for essentially the same functions reported as governmental activities in the Government-Wide Financial Statements. However, unlike the Government-Wide Financial Statements, Governmental Fund Financial Statements focus on near-term inflows and outflows of spendable resources, as well as balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financial requirements.

Because the focus of Governmental Funds is narrower than that of government-Wide financial statements, it is useful to compare the information presented for Governmental funds with similar information presented for governmental activities in the Government-Wide Financial statements. By doing so, readers may better understand the long-term impact of the city’s near-term financing decisions. Bothe the Governmental Fund Balance Sheet and the Governmental Fund statement of Revenues, Expenditures and Changes in fund Balance provide a reconciliation to facilitate this comparison between Governmental Funds and governmental activities.

The difference in the Governmental fund Financial Statements to those in the Government-Wide Financial Statements are explained in a reconciliation schedule following each Governmental Fund financial statement.

The City maintains 21 Governmental Funds. Information is presented in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund, Community Redevelopment Fund, and Maintenance Districts fund. These three funds are considered major funds. Data from the 18 Governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the Non-Major Governmental Funds is provided in the form of combining statements elsewhere in this report. The city’s major Governmental funds are presented in their respective columns and the remaining funds are combined into a column titled “non-Major Governmental Funds.” For each major fund, a budgetary comparison statement is presented. Information on Non-Major Funds can be found in the combining schedules sections of this report.

Proprietary Funds – The City maintains four Proprietary Funds. Proprietary Funds provide the same type of information as government-Wide financial Statements, only in more detail. The Proprietary Fund financial statements provide separate information for water, sanitation, domestic waste water and industrial waste water, all of which are considered to be major funds. Enterprise funds are used to report the functions presented as business-type activities in the government-Wide Financial Statements. The basic Proprietary Fund financial statements can be found on pages 15 through 17 of this report.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Statement of Net Assets – As noted earlier, net assets may serve as a useful indicator of a government’s financial position. The City assets exceeded liabilities by $28,319,996 at June 30, 2009. Net assets of $7,006,290 from business-type activities are joined by net assets of $21,313,706 from governmental activities. The city has $13,606,717 in capital assets (1.e. land, buildings, and equipment) from governmental activities and $19,680,853 in capital assets from business-type activities at the end of the fiscal year. Total capital assets were $33,287,570 or 81 percent of total assets. The city uses capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be liquidated to pay for these liabilities. The following schedules represent a summary of the City’s net assets and activities for the year ended June 30, 2009 and 2008:

City of Livingston’s Summary of Net Assets

Governmental Activities

Business-Type Activities

Current-Year Total

Prior Year Total

 

Current and other assets

10,183,712

(2,456,702)

7,727,010

9,241,439

Capital assets (net)

13,606,717

19,680,853

33,287,570

33,203,376

Total Assets

23,790,429

17,224,151

41,014,580

42,444,815

 

 

 

 

 

Other liabilities

1,038,521

790,540

1,829,061

1,033,155

Long-term liabilities

1,438,202

9,427,321

10,865,523

11,029,348

Total Liabilities

2,476,723

10,217,861

12,694,584

12,062,503

 

 

 

 

 

Investments in capital assets, net of related debt

12,492,492

10,361,341

22,853,803

22,396,979

Restricted

719,801

1,817,627

2,537,428

3,455,408

Unrestricted

8,101,443

(5,172,678)

2,928,765

4,529,925

Total Net Assets

21,313,736

7,006,290

28,319,996

30,382,312

 

City of Livingston’s Statement of Activities and Changes in Net Assets

Governmental Activities Business-Type Activities Current-Year Total Prior Year Total
REVENUE
  Program Revenue
     Charges for service $1,881,941 $4,358,087 $6,240,028 $5,708,842
     Operating grants and contributions 1,439,625 5,000 1,444,625 683,514
     Capital grants and contributions 193,743 24,600 218,343 4,213,990
  General Revenue 0
     Property taxes 2,738,512 2,738,512 3,124,132
     Sales taxes 1,241,755 1,241,755 1,158,019
     Franchise and other taxes 413,824 413,824 378,527
     Investment income 88,698 17,759 106,457 570,552
     Other 197,570   197,570 590,492
         Total Revenue 8,195,668 4,405,446 12,601,114 16,428,068
EXPENSES
    General Government 602,924 602,924 483,955
    Parks and community services 567,088 567,088 685,410
    Public safety 3,510,520 3,510,520 3,319,346
    Public works 1,942,625 1,942,625 1,452,066
    Planning and community developmt 2,612,005 2,612,005 2,336,311
  Debt Service
    Interest and fiscal charges 22,517 22,517 196,820
  Business type expenses:
    Water 1,822,347 1,822,347 1,651,777
    Sanitation 1,099,815 1,099,815 1,103,639
    Domestic Sewer 1,986,135 1,986,135 1,814,508
    Industrial Sewer 497,454 497,454 3,178,195
Total expense 9,257,679 5,405,751 14,663,430 16,222,027
Increase (Decrease) In Net Assets
    Before Transfers (1,062,011) (1,000,305) (2,062,316) 206,041
Transfers (58,403) 58,403
Increase in Net Assets (1,120,414) (941,902) (2,062,316) 206,041
Net Assets
   Beginning of Year 22,434,120 7,948,192 30,382,312 30,176,271
   End of Year $21,313,706 $7,006,290 $28,319,996 $30,382,312
Governmental activities decreased net assets by $1,120,414 and business type activities decreased net assets by $941,902.
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