comprehensive annual financial report - City of St. Petersburg

City of St. Petersburg, FL
Management’s Discussion and Analysis
For the Year Ended September 30, 2010
Unaudited
Business-Type Activities
Business-type activities change in net assets decreased by $13.1 million from the prior year. The
decrease was due primarily to a decrease in capital grants and contribution revenue of $7.3
million as there were certain one-time grants in the prior year; a decrease of 1.4 million (0.9%) in
charges for services; and a decrease of $3.5 million in other revenues which includes investment
income as investment earnings are down from the prior year. Transfers from business-type
activities decreased by $1.4 million during 2010.
Expenses for the water and wastewater utility increased $2.4 million, or 2.5% due to increased
costs for water from Tampa Bay Water. Stormwater utility expenses increased 3.1%, Sanitation
expenses increased 2.2%, and the Port, Marina and The Jamestown Complex also experienced
increases in expenses. Other business-type activities also decreased expenses, including a
decrease of $547,518 (9.3%) in expenses relating to the Mahaffey Theater complex, and a
decrease in expenses of $397,896 (9.4%) relating to the City’s golf course operations.
FINANCIAL ANALYSIS OF CITY FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the City’s
financing requirements. In particular, unassigned fund balance may serve as a useful measure of
a government’s net resources available for spending at the end of the fiscal year. During 2010 the
City early implemented GASB 54,”Fund Balance Reporting and Governmental Fund Type
Definitions”. The new standard replaces the previous reserved, unreserved, and designated fund
balance categories with five classifications: nonspendable fund balance, restricted fund balance,
committed fund balance, assigned fund balance, and unassigned fund balance.
Fund balances are the differences between assets and liabilities in a governmental fund. The
nonspendable fund balance includes amounts that are not in spendable form, or amounts that are
required to be maintained intact. Restricted fund balance include amounts that can be spent only
for the specific purposes stipulated by external providers, such as grant providers or bondholders,
as well as amounts that are restricted constitutionally or through legislation. Committed fund
balance includes amounts that can be used only for the specific purposes that are determined by a
formal action of the government’s highest level of decision making authority. Assigned fund
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