CITY OF FAYETTEVILLE, GEORGIA MANAGEMENT’S DISCUSSION AND ANALYSIS

JULY 31, 2014

This management discussion and analysis of the City of Fayetteville, Georgia’s financial performance provides an overall review of the City’s financial activities for the fiscal year ended July 31, 2014. It is designed to give the reader an objective and easily readable analysis of the City’s financial performance. The primary intent of this discussion and analysis is to look at the City’s financial performance as a whole; readers should also review the letter of transmittal, notes to the basic financial statements, and the financial statements to enhance their understanding of the City’s financial performance.

Financial Highlights

Key financial highlights for FY 2014 are as follows:

In total, combined net position increased $2,025,560 which represents a 2.3% increase over FY 2013. This increase can primarily be attributed to the increase of charges for services and other taxes.

 Combined tax revenues accounted for $9,443,106 or 69.3% of all revenues from governmental activities. Service specific revenues in the form of charges for services, operating grants and contributions, and capital grants and contributions accounted for $4,174,959 or 30.6% of total revenues of $13,623,958 from governmental activities.

 The City had $11,372,842 in expenses related to governmental activities; $4,174,959 of these expenses were offset by charges for services, grants, and contributions. General revenues (primarily taxes) of $9,448,999 provided for these services as well as increasing the City’s net position by $2,251,116.

 Total Water and Sewer Fund revenues for fiscal year 2014 were $5,674,108. Total expenses for fiscal year 2014 were $5,188,075. Capital contributions were recorded in the amount of $297,696, including but not limited to donated property and sewer proportionate share. The change in net position after depreciation and non-operating revenues and/or expenses was ($193,578) for the fiscal year end.

 Revenues from the General Fund were $10,333,483 for fiscal year 2014, an increase of approximately 6.8% over the prior fiscal year, due to an increase in local option sales tax. General Fund expenditures totaled $8,568,615 for the fiscal year ending July 31, 2014, an increase of 1.1% over last fiscal year.

Overview of the Financial Statements

This comprehensive annual financial report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the City of Fayetteville as a financial whole, or as an entire operating entity.