Comprehensive Annual Financial Report - City of Santa Monica
Comprehensive Annual Financial Report - City of Santa Monica
Comprehensive Annual Financial Report - City of Santa Monica
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CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis<br />
Year ended June 30, 2008<br />
As management <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California (<strong>City</strong>), we <strong>of</strong>fer readers <strong>of</strong> the <strong>City</strong>’s<br />
<strong>Comprehensive</strong> <strong>Annual</strong> <strong>Financial</strong> <strong>Report</strong> (CAFR) this narrative overview and analysis <strong>of</strong> the financial<br />
activities <strong>of</strong> the <strong>City</strong> for the fiscal year ended June 30, 2008. We encourage readers to consider the<br />
information presented here in conjunction with additional information that we have furnished in the <strong>City</strong>’s<br />
basic financial statements, which immediately follow this section, and the CAFR transmittal letter in the<br />
preceding Introductory Section.<br />
FINANCIAL HIGHLIGHTS<br />
• The total assets <strong>of</strong> the <strong>City</strong> for its governmental and business-type activities exceeded its liabilities<br />
as <strong>of</strong> June 30, 2008 by $1.5 billion. Of this amount, $963.4 million are capital assets, net <strong>of</strong> related<br />
debt, $233.9 million is for restricted uses as specified by entities outside <strong>of</strong> the <strong>City</strong> government,<br />
and $314.4 million is for unrestricted uses in accordance with finance-related legal requirements<br />
reflected in the <strong>City</strong>’s fund structure.<br />
• The <strong>City</strong>’s total net assets increased $6.0 million during the current fiscal year, after an $8.4 million<br />
restatement described in note 4.<br />
• At the end <strong>of</strong> the current fiscal year, the <strong>City</strong>’s governmental funds reported total ending fund<br />
balances <strong>of</strong> $426.1 million, a decrease <strong>of</strong> $47.6 million compared with the prior fiscal year, after a<br />
$4.0 million restatement described in note 4. Of this amount, $298.9 million was reserved for uses<br />
set by various legal requirements and $127.2 million was unreserved. Of the unreserved amount,<br />
$72.1 million was designated for various specific uses by the <strong>City</strong> Council, and $55.1 million was<br />
unreserved and undesignated.<br />
• At the end <strong>of</strong> the current fiscal year, the General Fund fund balance was $148.8 million, a decrease<br />
<strong>of</strong> $6.9 million from the previous fiscal year, which consisted <strong>of</strong> a decrease <strong>of</strong> $10.8 million <strong>of</strong><br />
reserved fund balance and an increase <strong>of</strong> $3.9 million <strong>of</strong> unreserved fund balance. Of the $67.8<br />
million unreserved fund balance, $62.6 is designated and $5.2 million is undesignated.<br />
• The <strong>City</strong>’s investment in capital assets increased by $82.5 million or 9.4%. Please see further detail<br />
<strong>of</strong> capital assets in note 7.<br />
• The <strong>City</strong>’s long-term debt decreased by $10.2 million or 4.9% during the current fiscal year. Please<br />
see further detail <strong>of</strong> long-term debt in note 9.<br />
OVERVIEW OF THE BASIC FINANCIAL STATEMENTS<br />
Management’s Discussion and Analysis is intended to serve as an introduction to the <strong>City</strong>’s basic<br />
financial statements. The <strong>City</strong>’s basic financial statements include three components: government-wide<br />
financial statements, fund financial statements, and notes to the basic financial statements. The major<br />
features <strong>of</strong> these financial statements, including the portion <strong>of</strong> the city government they cover and the<br />
types <strong>of</strong> information they contain, are summarized on the following page. The remainder <strong>of</strong> this overview<br />
section <strong>of</strong> management’s discussion and analysis explains the structure and contents <strong>of</strong> each <strong>of</strong> the<br />
statements.<br />
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