Comprehensive Annual Financial Report 12/31/2004

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City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2004 Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 33 -52 of this report. Other information. The combining statements and schedules referred to earlier in conjunction with nonmajor governmental funds can be found on pages 59 -72 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS: As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Lino Lakes, assets exceeded liabilities by $79,560,228 at the close of the most recent fiscal year, an increase of $5,013,223 over the previous year. By far the largest portion of the City of Lino Lakes' net assets (70 percent) reflects its investment in capital assets (e.g. land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. The City of Lino Lakes uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Lino Lakes' investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. A condensed version of the Statement of Net Assets at December 31, 2004 follows: Net Assets at Year -end (in millions) Governmental Business -type Total Activities Activities Government 2004 2003 2004 2003 2004 2003 Current and other assets $20.88 $20.51 $4.89 $3.91 $25.77 $24.42 Capital assets 46.10 45.29 29.42 28.54 75.52 73.83 Total assets 66.98 65.80 34.31 32.45 101.29 98.25 Non - current liabilities outstanding 17.82 19.29 2.75 3.00 20.57 22.29 Other liabilities 1.06 1.28 .10 .13 1.16 1.41 - Total liabilities 18.88 20.57 2.85 3.13 21.73 23.70 Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 28.80 25.99 26.71 25.54 55.51 51.53 3.07 3.57 3.07 3.57 16.23 15.67 4.75 3.78 20.98 19.45 $48.10 $45.23 $31.46 $29.32 $79.56 $74.55 The remaining balance of the City of Lino Lakes' net assets are unrestricted net assets (30 percent) and may be used to meet the government's ongoing obligations to citizens and creditors. 12