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Management’s Discussion and Analysis
<br />As management of the City of Elk River, we offer readers of the City’s financial statements this narrative overview and
<br />analysis of the financial activities of the City for the fiscal year ended December 31, 2006. We encourage readers to
<br />consider the information presented here in conjunction with the additional information that we have furnished in our letter
<br />of transmittal, which can be found on pages1 - 5 of this report.
<br />Financial Highlights
<br />The assets of the City of Elk River exceeded its liabilities at the close of the most recent fiscal year by $189,380,638 (net
<br />assets). Of this amount, $42,067,362 (unrestricted net assets) may be used to meet the City’s ongoing obligations to
<br />citizens and creditors.
<br />The City’s total net assets increased by $13,761,649, which is primarily due to contribution of capital assets.
<br />As of the close of the current fiscal year, the City of Elk River’s governmental funds reported combined ending fund
<br />balances of $27,957,749.
<br />SpecialDebtCapital
<br />GeneralRevenueServiceProjectsTotal
<br />Reserved$ 7,716,612-$$2,262,414$ 9,979,026-$
<br />Designated4,816,3863,384,806 8,543,898-16,745,090
<br />Undesignated 1,685,958- (452,325)-1,233,633
<br />$4,816,386$12,787,376$2,262,414$8,091,573$27,957,749
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<br />The City of Elk River’s total long-term liabilities increased $698,310 during the current fiscal year, from $36,427,227 to
<br />$37,125,537.
<br />BeginningEnding
<br />BalanceAdditionsReductionsBalance
<br />Governmental activities:
<br />Bonds payable$ 3,657,00019,977,701$ $(6,627,867)$17,006,834
<br />Capital leases 2,332,694- (423,969)1,908,725
<br />Compensated absences 481,096 282,173(260,075)503,194
<br />Total governmental activities20,458,797 6,271,867(7,311,911)19,418,753
<br />Business-type activities:
<br />Bonds payable13,135,000 3,595,000(2,405,000)14,325,000
<br />Notes payable2,538,226 661,000(132,406)3,066,820
<br />Compensated absences295,204 320,298(300,538)314,964
<br />Total business-type activities15,968,430 4,576,298(2,837,944)17,706,784
<br />Total City long-term liabilities$ 10,848,16536,427,227$$(10,149,855)$37,125,537
<br />Overview of the Financial Statements
<br />This discussion and analysis are intended to serve as an introduction to the City of Elk River’s basic financial statements.
<br />The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund
<br />financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in
<br />addition to the basic financial statements themselves.
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