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Management's Discussion and Analysis -Continued
<br />April 7, 2008
<br />STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
<br />While the Statements of Net Assets shows the change in financial position of net assets, the Statements of Revenues, Expenses
<br />and Changes in Net Assets, provides answers as to the nature and source of these changes. As can be seen in Table A-2, the
<br />"Operating Revenues" was the main source of the increase in net assets of $1,985,306 fisca12007. A closer examination of the
<br />individual categories affecting the source of changes in net assets is discussed below:
<br />TABLE A-2
<br />Condensed Statements of Revenues,
<br />Expenses and Changes in Net Assets
<br /> Increase
<br /> 2007 2006 (Decrease)
<br />Revenues
<br />Operating $ 21,779,709 $ 18,727,649 $ 3,052,060
<br />Nonoperating 2,018,854 3,085,608 (1,066,754)
<br />Total revenues 23,798,563 21,813,257 1,985,306
<br />
<br />Expenses
<br />Operating 20,375,601 17,729,993 2,645,608
<br />Nonoperating 542,823 464,296 78,527
<br />
<br />Total expenses 20,918,424 18,194,289 2,724,135
<br />Income before operating transfers 2,880,139 3,618,968 (738,829)
<br />Transfers to other City funds (503,000) (451,018) (51,982)
<br />
<br />Change in net assets 2,377,139 3,167,950 (790,811)
<br />Net assets, January 1 42,655,242 39,910,548 2,744,694
<br />Prior period adjustments (186,391) (423,256) 236,865
<br />
<br />Net assets, December 31 $ 44,845,990 $ 42,655,242 $ 2,190,748
<br />Revenues
<br />Table A-2 shows that operating revenue increased by 16 percent in 2007 for the Water and Electric Departments combined. This
<br />increase was due mainly to customer growth and rate increases. Non operating revenue decreased 35 percent as a result of the
<br />decrease in construction this year. Specifically, on the water side, the contributed infrastructure was down by $545,709. Between
<br />the two departments, Connection Fees were down $350,061.
<br />Total Expenses
<br />In reviewing total expenses in Table A-2 you will notice that there was an increase of 14 percent overall. The Electric
<br />Department experienced an increase of 14 percent in operating expenses, while the Water Department's operating expenses
<br />increased by 10 percent. The increase in operating expenses for the Electric Department mainly resulted from the purchased
<br />power increasing by $2,074,576 over 2006 or 21 percent. The increase in operating expenses for the Water Department resulted
<br />mainly from production expenses which increased by 40 percent due to increased preventative maintenance on the wells, and
<br />cathodic protection that was applied to the Hillside water tower.
<br />-IV-
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