CITY OF MONTE VISTA, COLORADO
<br /> MANAGEMENT'S DISCUSSION AND ANALYSIS
<br /> 1 December 31, 2011
<br /> 1 Financial Analysis of the Government's Funds
<br /> The City of Monte Vista uses fund accounting to ensure and demonstrate compliance with finance-related legal,
<br /> federal and state requirements.
<br /> • Governmental Funds. The focus of the City's governmental funds is to provide information on near-term
<br /> inflows, outflows and balances of resources that are available for spending. Such information is useful in
<br /> assessing the City's financing requirements. In particular, fund balances may serve as a useful measure of
<br /> a government's net resources available for spending at the end of the fiscal year. Types of governmental
<br /> funds reported by the City of Monte Vista include the General Fund, Recreation Fund, Grant Fund,
<br /> ' Capital Projects Fund, and other nonmajor funds. As of the end of the current fiscal year, the City's
<br /> governmental funds reported combined ending fund balances of$2,778,685, a decrease of$63,501 from
<br /> the prior year ending fund balances. Beginning in fiscal year 2011, the City implemented GASB
<br /> Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This statement is
<br /> intended to improve the usefulness of fund balance information by providing clearer fund balance
<br /> classifications that can be more consistently applied and by clarifying the existing governmental fund type
<br /> definitions. As a result the City's fund balances are classified based on the extent to which the City is
<br /> bound to honor constraints for the specific purpose on which amounts in the fund can be spent. In
<br /> accordance with the Statement the fund balances for the City were classified in the following categories:
<br /> Restricted Fund Balance—are restricted when constraints placed on the use of resources
<br /> are either (a) externally imposed by creditors, grantors, contributors, or laws or
<br /> regulations of other governments or(b) imposed by law through constitutional provisions
<br /> or enabling legislation. As of December 31, 2011, the City's governmental funds
<br /> reported a restricted fund balance of $2,003,678, a majority of this fund balance is
<br /> restricted for capital projects and improvements.
<br /> SCommitted Fund Balance— are amounts that can only be used for specific purposes as a
<br /> result of constraints imposed by the City Council. Committed amounts cannot be used
<br /> for any other purpose unless the Council removes those constraints by taking the same
<br /> type of action. Committed fund balances differ from restricted balances because the
<br /> constraints on their use do not come from outside parties, constitutional provisions, or
<br /> enabling legislation. The City's governmental funds reported a committed fund balance
<br /> of$74,142 as of December 31,2011.
<br /> Assigned Fund Balance—are amounts a government intends to use for a specific purpose:
<br /> intent can be expressed by the City Council or by an official or body to which the
<br /> governing body delegates the authority. The City's governmental funds reported an
<br /> assigned fund balance of$49,927,which is designated for subsequent year expenditures.
<br /> Unassigned Fund Balance — are amounts that are available for any purpose; these
<br /> amounts are reported only in the General Fund. The City's General Fund reported an
<br /> unassigned fund balance of$650,938 as of December 31, 2011.
<br /> Revenue. Revenues in governmental funds decreased from $4,121,736 to $3,738,817, a decrease of $382,919
<br /> from the prior year. The majority of the decrease was in intergovernmental revenue with a decrease of$255,844,
<br /> and other revenues decreased by $152,211, mostly due to a decline in grant activity. Tax revenue increased by
<br /> $6,598 and charges for services increase by $18,538 compared to 2010. Of total revenue received in 2011,
<br /> $1,987,751 (53%) was generated by tax revenue, $1,277,508 (34%) by intergovernmental revenue, $249,535
<br /> (7%)by charges for services,and$224,023 (6%)by other sources.
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