VLAWMO Annual Financial Report 2007

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Management's Discussion and Analysis As management of the Vadnais Lake Area Water Management Organization, (the Organization), Vadnais Heights, Minnesota, we offer readers of the Organization's financial statements this narrative overview and analysis of the financial activities of the Organization for the fiscal year ended December 31, 2007. We encourage readers to consider the information presented here in conjunction with the financial statements, which follow this section. Financial Highlights • The assets of the Organization exceeded its liabilities at the close of the most recent fiscal year by $204,124 (net assets). Of this amount, $38,537 (unrestricted net assets) may be used to meet the Organization's ongoing obligations to its member cities. • The Organization's total net assets increased by $149,930. This increase is primarily due to grant funding received from the State of Minnesota. • As of the close of the current fiscal year, the Organization's governmental funds reported combined ending fund balances of $45,466, a decrease of $11,548 in comparison with the prior year. This decrease in fund balance is due to expenditures in excess of revenues. • The ending General fund balance of $45,466 represents 12 percent of the 2008 budgeted expenditures. This balance represents approximately one and a half months expenditures. • The Organization's unrestricted cash and temporary investments increased to $378,000 from $127,317 during 2007. This increase is primarily due to Storm Water Utility fees collected during 2007. These revenues are deferred in the fund financial statements as they are representative of 2008 budget activity. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Organization's basic financial statements. The Organization's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other required supplemental information in addition to the basic financial statements themselves. -I-