MANAGEMENT’S DISCUSSION AND ANALYSIS

Governmental Activities

Please note that public safety expenses of $6,505,689 represent 60.5% of the total governmental expenses. The next most significant program expense is public works, which totals $1,707,680 and 15.9% of the total. Interest expense of $154,685 represents only 1.44%. Interest expense was attributable to the GMA Lease Program to lease/purchase the City’s public safety vehicles as well as the Certificates of Participation for the construction of the law enforcement center.

Business-Type Activities

The most significant business-type activity of the City is the Water and Sewer Department. The majority of its revenue was derived from user fees charged for product and service.

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 18.9% of the combined revenues, the City is dependent upon tax revenues for governmental activities. The net cost of services amounts to $8,719,654, which approximates 100% of our local tax receipts of $8,700,953, along with $9,253 in interest earnings and $9,448 in fund balance. This information was taken from the Statement of Activities on pages 14 and 15.