07-1784 Comprehensive Annual Financial Report (CAFR) - FY 2006

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CITY OF CASSELBERRY, FLORIDA MANAGEMENT'S DISCUSSION AND ANALYSIS September 30, 2006 The City of Casselberry, Florida's (the "City") Management Discussion and Analysis (the "MD&A") presents an overview of the City's financial activities for the fiscal year ended September 30, 2006. Please read it in conjunction with the letter of transmittal in the introductory section, and the City's financial statements following the MD&A. Financial Highlights The assets of the City exceeded its liabilities at the close of fiscal year 2006 by $65.7 million (net assets). Of this amount, $25.3 (unrestricted net assets) may be used to meet the City's ongoing obligations to citizens and creditors. At September 30, 2006, the City's governmental funds reported combined ending fund balances of $16.8 million, an increase of $1 million III comparison with the prior year's restated combined ending fund balances. At September 30, 2006, unreserved fund balance for the General Fund was $5.9 million or 29.6% of total General Fund expenditures and transfers out. Governmental funds revenues decreased $940 thousand or 4.2% from the prior fiscal year. This was largely due to a decrease of $2.6 million in intergovernmental revenues, mostly grants. Governmental funds expenditures decreased $4.7 million due primarily to a decrease in hurricane recovery related expenditures and from the completion of major City projects in 2005. Business-type funds net assets increased $2.1 million or 6.6% from the prior fiscal year. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements The government-wide financia' statements, which consist of the following two statements, are designed to provide readers with a broad overview 01 the City's finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during fiscal year 2005. All changes in net assets are reported as soon as the underlying event, giving rise to the change, occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected but earned, and unused vacation leave). Both of these financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, physical environment, 3