C150356 Feasibility Study (financials)

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Bellyache Ridge Metropolitan District Management's Discussion and Analysis December 31, 2012 As management of Bellyache Ridge Metropolitan District, we offer readers of the District's financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended December 31, 2012. Overview of the Financial Statements T is discussion and analysis is intended to serve as an introduction to the District's basic financial statements. The District's basic financial statements comprise three components: 1) government- w'de financial statements; 2) fund financial statements; and 3) notes to the financial statements. T is report also contains additional supplementary information in addition to the basic financial statements and notes. Government-wide Financial Statements T e government-wide financial statements are designed to provide readers with a broad overview of th- District's finances, in a manner similar to a private-sector business. T e Statement of Net Position presents information on all the District's assets, deferred outflows, liabilities and deferred inflows, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the D`strict is improving or deteriorating. T e Statement of Activities presents information showing how the government's net position c anged during the most recent fiscal year. All changes in net position are reported as soon as the u derlying event giving rise to the change occurs, regardless of the timing of related cash flows. T us, revenues and expenses are reported in this statement for some items that will only result in c.sh flows in future fiscal periods. T e governmental activity of the District includes the operations and maintenance of the District's du mestic water distribution systems. Ti e government-wide financial statements can be found on pages 1 and 2 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District currently has just a General Fund, which is a governmental fund. Governmental Funds Gbvernmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term in ows and outflows of expendable resources, as well as on balances of expendable resources III