|
anaee~~s ~~cu~s~on and Analy~~,~
<br />This section of the Elk River Municipal Utilities the Utilities} annual financial report presents our analysis of the Utilities'
<br />financial performance during t11e f scal year that ended December 31, 2409, Please read it in conjunction with the financial
<br />statements, which follow this section.
<br />~`II~ANC~AL HIGHLIGHTS
<br />The assets of the Utilities exceeded its liabilities at the close of the most recent fiscal year by $46,364,560 ~~et assets},
<br />Net Assets increased by $635,430 or 1.0 percent,
<br />The Utilities' cash balance at the close of the cur~~ent fiscal year was $11,181,181, $2,588,901 ofwh~ch Was cash with
<br />escrow agent, which will be used for the advance refunding of tlae 2001A G.C. Water Revenue bonds in 2010,
<br />The past two years have seen declining construction, 2009 actually had slightly negative growth of 0.3 percent. Tlie
<br />decreased construction activity has allowed for a more pro-active focus on maintenance.
<br />Electric usage was up an average of 3.8 percent, due to large industrial operations. Residential usage was down 1
<br />percent, Commercial usage was down 5.0 percent, and industrial usage was up 8.0 percent,
<br />~ Water usage was up an average of 4.9 percent. Residential usage was up 0,3 percent, and Commercial usage was up 1.5
<br />percent,
<br />®'VER~EW ~F THE F~ANCIAL STATEMENTS
<br />This annual report consists of three parts; Management's Discussion and Analysis, Financial Statements, and Supplementary
<br />fnformation. The Financial Statements also include notes that explain in more detail some of the information in the financial
<br />statements,
<br />REQUIRED FIN~ICIAL STA.TEI~ENTS
<br />The financial statements of the Utilities report info~•mation about the Utilities using accounting methods similar to those used by
<br />private sector companies. These statements offer shol•t- and long-term financial information about its activities, The Statements
<br />of Net Assets includes all of the Utilities' assets and liabilities and provides information about the nature and amounts of
<br />investments in resources bassets} and the obligations to Utilities' creditors liabilities}, 1t also provides the basis for computing
<br />rate of return, evaluating the capital structure of the Utilities and assessing the liquidity and financial flexibility of the Utilities.
<br />All of the current year's revenues and expenses are accounted for in the Statements of Revenues, Expenses and Changes in Net
<br />Assets. This statement measures the success of the Utilities' operations aver the past year and can be used to determine whether
<br />the Utilities' has successfully recovered all its costs through its user fees and other charges, profitability, and credit worthiness,
<br />The final required financial statement is the Statements of Cash Flows. The prirnaiy purpose of this statement is to provide
<br />information about the Utilities' cash receipts and cash payments during the reporting period, The statement repo~•ts cash receipts,
<br />cash payments and net changes in cash resulting from operations, investing and financing activities and provides answers to such
<br />questions as where did cash come from, what was cash used for and what was the change in cash balance during the reporting
<br />period,
<br />FINANCIAL .ANALYSIS ®F THE UTILITIES
<br />Qur analysis of the Utilities begins on page 18 in the Financial Section, Cne of the most irnpoztant questions asked about the
<br />Utilities' finances is "Zs the Utilities as a whole better off or worse off as a result of this year's activities?" The Statements of Net
<br />Asset, and the Statements of Revenues, Expenses and Changes in Net Assets report information about the Utilities' activities in a
<br />way that will help answer this question, These two statements repo~•t the net assets of the Utilities and changes in these net assets,
<br />You can thhik of the Utilities' net assets the difference between assets and liabilities} as one way to measure financial health or
<br />financial position. Over time, increases or decreases in the Utilities' net assets are one indicator of whether its financial health is
<br />improving or deteriorating. However, you will need to consider other non-financial factors such as changes in economic
<br />conditions, population growth, zoning, and new or changed government legislation.
<br />-11_
<br />
|