fund balances 27

City of Coral Springs, Florida

Management’s Discussion and Analysis (Unaudited)

The decrease in deferred inflows of resources is due primarily to a decrease in the net difference in projected and actual earnings on investments offset by an increase in demographic experience and assumption changes used in the calculation of the net pension liability.

The largest portion of the City’s net position, $163.3 million or 73% reflects its investment in capital assets (for example: land, land improvements, public art, buildings, infrastructure, equipment, and construction in progress) less any related debt used to acquire these assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, 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.

Restricted net position in the amount of $30.8 million or 14% is reported separately to show legal constraints from covenants and enabling legislation. The remaining balance of unrestricted net position of $29.6 million or 13% may be used to meet the City’s ongoing obligations to citizens and creditors and is designated in the financial policies and strategies. The City can report positive balances in all reported categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year.

Summary of Changes in Net Position

The following information is presented to assist the reader in understanding the different types of normal impacts that can affect revenue:

1. Economic condition can reflect a declining, stable, or growing environment and has an impact on property, non-ad valorem assessments, sales, or other tax revenue as well as consumer spending habits for building permits, user fees, and consumption. 2. The City Commission has the authority to set increases or decreases in the City’s rates such as water, sewer, permitting, impact fees, user fees and certain taxes. 3. Changing patterns in intergovernmental and grant revenue (both recurring and nonrecurring) can change and impact the annual comparisons. 4. Market impacts on investment income may cause investment revenue to fluctuate from year to year. Introduction of new programs can have an impact on property, non-ad valorem assessments, sales, or other tax revenue as well as consumer spending habits for building permits, user fees, and consumption. Some other impacts on expenses are as follows:

1. Changes in service demand levels can cause the City to increase or decrease authorized staffing. Staffing costs (salaries and related benefits) represent approximately 70% of the City’s operating costs. 2. Salary increases such as performance increases and market adjustments can impact personal service costs. 3. While inflation appears to be modest, the City is a consumer of certain commodities such as supplies, fuels and parts. Some functional expenses may experience unusual commodity specific increases.