VLAWMO Annual Financial Report 2007

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Management's Discussion and Analysis - Continued March 19, 2008 Financial Analysis of the Government's Funds As noted earlier, the Organization uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds. The focus of the Organization's governmental funds is to provide information on near -term inflows, outflows and balances of spendable resources. Such information is useful in assessing the Organization's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end 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. All of this balance, $45,466, constitutes unreserved fund balance, which is available for spending at the Organization's discretion. The general fund is the chief operating fund of the Organization. At the end of the current year, the fund balance of the general fund was $45,466. As a measure of the general fund's liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance represents 13 percent of 2007 fiord expenditures and 12 percent of 2008 budgeted fund expenditures. The fund balance of the Organisation's general fund decreased by $11,548 during the current fiscal year. The key factor in this reduction was expenditures in excess of revenues. General Fund Budgetary Highlights The Organization's general fund budget was amended during the year. The actual results were much more favorable than those projected by the 2007 budget. Revenues were in excess of budget by $139,865, due to grant revenues from the State of Minnesota. Expenditures were lower than budgeted by $74,892. The largest variance was provided by general administrative wages, which were under budget by $30,486. Some of the notable negative variances included Projects and Programs monitoring, which were under budget by $20,932 and 16,406 respectively. Capital Asset and Debt Administration Capital Assets. The Organisation's investment in capital assets for its governmental activities as of December 31, 2007, amounts to $165,587 (net of accumulated depreciation). This investment in capital assets includes infrastructure related to the Lambert Creek Flume project. Major capital asset events during the current fiscal year included the following: • From June 2002 to January 2008 VLAWMO completed to improve the water quality along Lambert Creek which empties into Vadnais Lake. Vadnais Lake is the drinking water reservoir for the St. Paul Regional Water Service (SPRWS), which serves 400,000 drinking water customers in eight communities. Stabilization work was done on inlet channel into Lambert Lake in 2007 • In 2007, VLAWMO replaced two flumes (at Oakmede Lane and Kohler Road), improved road drainage areas along Kohler Road and constructed water quality pond improvements just north of Kohler Road. The work for these projects was completed in December 2007. Replacement of vegetation will take place in spring 2008. A third flume is purchased and will likely be installed near County Road F in 2008. Additional information on the Organization's capital assets can be found in Note 3C on page 15 of this report.