MANAGEMENT’S DISCUSSION AND ANALYSIS

Proprietary Net Assets

At the end of the fiscal year 2011, the combined net assets of the City’s Proprietary Funds were $15,085,147. The most significant event that took place in the Water and Sewer Fund was the refinancing of the existing debt from a fixed payment GEFA Loan to a more flexible payment plan through a new revenue bond issue.

General Fund Budgeting Highlights

 The City’s budget is prepared according to Georgia law. The most significant budget fund is the General Fund.

 For the General Fund, the actual revenues of $9,200,765 were below the final budgeted amount of $9,304,311 by ($103,546). This difference was primarily due to a shortfall in revenues for sales taxes and fines and forfeitures.

 The actual expenditures of $9,169,524 were less than the final budgeted amount of $9,464,488 by $294,964. This difference was primarily due to vacant personnel positions.

 The original budget had to be decreased by ($343,898) due to the change in revenues. Property Taxes were originally budgeted as $2,043,566 with actual revenues of $1,981,025 for a total decrease of ($62,531), Other Taxes were originally budgeted as $3,106,423 with actual revenues of $3,247,506 for a total increase of $141,083, Licenses and Permits were originally budgeted as $277,442 with actual revenues of $217,496 for a decrease of ($59,946), and Fines and Forfeitures were originally budgeted as $1,600,000 with actual revenues of $1,191,994 for a decrease of ($408,006). Due to the downturn in the economic conditions which have rendered the historical data and past trends irrelevant, forecasting has become difficult.

Capital Assets and Debt Administration

At the end of fiscal year 2011, the City had $97,763,511 invested in capital assets, which is an increase over FY2010 of $2,069,960. Table 5 shows fiscal years 2010 and 2011 balances of the Capital Assets, net of depreciation as presented on pages 39 through 41 under Note 7 – Capital Assets.