MANAGEMENT’S DISCUSSION AND ANALYSIS

Cost of Program Services

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental and business-type activities, the combined total cost of services and the combined net cost of services; that is, it identifies the cost of these services supported by tax revenue.

Although program revenues make up 35.6% of the combined revenues, the City is dependent upon tax revenues for governmental activities. The net cost of services amounts to $6,343,367 which approximates 76.6% of our local tax receipts of $8,276,490. This information was taken from the Statement of Activities on pages 13 and 14.

TABLE 3 – Governmental and Business Type Activities

Governmental Fund Balance

At the end of the fiscal year 2011, the combined ending fund balances for the City’s Governmental Funds were $5,789,522. Of the total fund balance, $5,643,901 is available as working capital for current spending in accordance with the purposes of the specific funds. The remainder of fund balance is designated to indicate that it is not available for new spending because it is committed for the following purposes: reserved as non-spendable $145,621 (pre-paid items and inventory).

The General Fund’s fund balance for the fiscal year ending 2011 was $3,049,931, which indicates a decrease in fund balance over previous year by ($47,627). The decrease in General Fund’s fund balance is due to the continued downturn in the economy. The fund balance of the City’s Impact Fee Fund decreased by ($779,822) during the fiscal year to an ending fund balance of $1,331,963. The SPLOST fund has many projects underway, which are currently listed as construction in progress. Information provided in Table 4 is from the Balance Sheet of Governmental Funds on page 15.