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CITY OF MONTE VISTA, COLORADO <br /> MANAGEMENT'S DISCUSSION AND ANALYSIS <br /> December 31, 2011 <br /> The City of Monte Vista adopts an annual budget for each of the individual governmental funds. A budgetary <br /> comparison schedule for each major fund is included in the fund financial statements to demonstrate compliance <br /> with the adopted budget. <br /> Proprietary Funds. When the City charges customers for the services it provides, these services are generally <br /> reported in proprietary funds. Proprietary funds provide the same type of information as shown in the <br /> government-wide financial statements, only in more detail. The City of Monte Vista maintains one type of <br /> proprietary fund called enterprise funds. Enterprise funds are used to present the same functions as the business- <br /> type activities presented in the government-wide financial statements. The City of Monte Vista uses an enterprise <br /> fund to account for water and sewer operations of the City. This fund is known as the City Service Utility Fund. <br /> Notes to the Financial Statements <br /> The notes to the financial statements provide additional information essential to a full understanding of the data in <br /> the government-wide and fund financial statements. <br /> Other Information <br /> In addition to the financial statements and accompanying notes, this report also presents other supplementary <br /> information concerning the City's nonmajor funds. The combining statements of the non-major governmental <br /> funds are presented after the notes to the financial statements. <br /> Government-wide Financial Analysis <br /> The focus of this financial analysis is on comparisons of the activities of the current year(2011)with those of the <br /> prior year(2010) and comparison of balances at year-end(December 31)for the same two years. <br /> 1 As noted earlier, net assets may serve, over time, as a useful indicator of a government's financial position. In the <br /> case of the City of Monte Vista, assets exceeded liabilities by$10,309,024 at December 31, 2011. <br /> The City's combined net assets for the governmental and business-type funds increased by$844,507 from 2010 to <br /> 2011. Of this total amount, governmental net assets increased by$665,038 and business-type net assets increased <br /> by$179,469. <br /> The City's net assets can be separated into three primary categories: 1) Invested in capital assets, net of related <br /> 1 debt, 2)Restricted assets, and 3)Unrestricted assets. <br /> The largest portion of the City's net assets reflects its investment of $5,895,990 in capital assets (e.g., land, <br /> buildings, improvements, equipment, and infrastructure); less any related outstanding debt used to acquire those <br /> assets. The City of Monte Vista uses these capital assets to provide services to citizens; consequently,these assets <br /> are not available for future spending. Although the City's investment in capital assets is reported net of related <br /> debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since <br /> the capital assets themselves cannot be used to liquidate these liabilities. <br /> An additional portion of the City's net assets of $2,432,945 represent resources that are subject to external <br /> restrictions on how they may be used. The remaining balance of$1,980,089, unrestricted net assets, may be used <br /> to meet the City's ongoing obligations to citizens and creditors. During the current fiscal year the City of Monte <br /> Vista's net assets increased by 844,507. <br /> I <br /> 1 5 <br />