MANAGEMENT’S DISCUSSION AND ANALYSIS

Governmental Activities

Please note that public safety expenses of $6,556,219 represent 57.6% of the total governmental expenses. The next most significant program expense is public works, which totals $2,095,224 or 18.4% of the total.

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 30.6% of the combined revenues, the City is dependent upon tax revenues for governmental activities. The net cost of services amounts to $7,197,883, which approximates 76.2% of our local tax receipts of $9,443,106. The remaining balance of tax receipts along with interest earnings of $5,893 creates an increase in net position of $2,251,116. This information was taken from the Statement of Activities on pages 13 and 14.