Statement of revenue, expenses and changes in net position

City of Coral Springs, Florida

Management’s Discussion and Analysis (Unaudited)

The City’s governmental activities net position decreased from $158.9 million in 2020 to $156.3 million in 2021. Total revenues from governmental activities increased by $5.9 million from fiscal year 2020. The increase is due primarily to a $3.1 million or 5.0% increase in property tax revenues which is from a 4.9% increase in the City’s total taxable assessed value, and a $4.2 million increase in charges for services. Charges for services increased because many services such as classes, summer programs, facility rentals that were canceled in fiscal year 2020 due to the COVID19 pandemic, were partially resumed in fiscal year 2021. Expenses during fiscal year 2021 increased $17.4 million or 9.9% primarily as a result of general government, police and fire and emergency services activities. The City’s business-type activities net position increased from $62.3 million in fiscal year 2020 to $67.4 million in fiscal year 2021. The $5.1 million increase is primarily due to a $2.9 million increase from current year operations in the Water and Sewer Fund, $2.0 million increase from current year operations in the Stormwater Fund, and a $0.2 million increase from current year operations in the Solid Waste Fund.

The Water and Sewer Fund’s operating earnings are primarily due to a rate increase implemented in October 2020. The water conservation rate structure modification increased certain rates by an average of 3.5%. The operating and administrative costs increase is primarily due to an increase in wastewater treatment fees charged to the City by Broward County and an increase of 3% for salaries and benefits.

The Stormwater Fund’s revenues are derived from a special assessment which is levied based upon a flat rate per equivalent residential unit (ERU). The Fund’s operating earnings are primarily due to a 3.5% rate increase offset by an increase in operating expenses due to a 3% increase in salaries and benefits.

The Solid Waste Fund residential assessment rate of $30 per single family home remained unchanged from the prior year. As a result, the Solid Waste Fund revenues remained flat while operating costs increased due to a rate increase from third-party haulers.

Capital grants and contributions increased $543,000 in fiscal year 2021. These contributions typically vary from year to year based on activity and fluctuations are expected.

Financial Analysis of the City of Coral Springs’ Funds

As noted earlier, the City uses fund accounting to help ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds

The focus of the City’s Governmental Funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, an unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

City of Coral Springs, Florida

Management’s Discussion and Analysis (Unaudited)

The General Fund is the primary operating fund of the City. At the end of the current fiscal year, the total fund balance reached approximately $47,714,000. The City’s approved fund balance policy requires a stabilization fund equal to a target level of a minimum of 17% up to 25% of budgeted General Fund expenditures less capital for the following year. This amount provides a fund for use in unforeseen, unbudgeted emergency situations and is classified as committed fund balance. As a measure of the General Fund’s liquidity, it may be useful to compare the total of unassigned fund balance and committed to stabilization fund balance to total fund expenditures as well as the total fund balance to total fund expenditures. The total of unassigned fund balance and committed to stabilization fund balance represents 25% of current year General Fund expenditures less capital, while total fund balance represents 40% of current year General Fund expenditures less capital.

The fund balance of the City’s General Fund increased by approximately $11,023,000 during the current fiscal year. This is due primarily to an increase in the City’s total taxable assessed value resulting in an increase in property taxes of $3.1 million and an increase in licenses and permits of $1.2 million due to increased construction and home renovation projects. Expenditures remained relatively flat increasing only 0.1% from the prior year.

The fund balance for the Fire Fund increased by $660,000 during the current fiscal year. Overall revenues increased by $1.2 million. This is due primarily to a $0.4 million increase in intergovernmental revenue and a $0.8 increase in charges for services. The increase in intergovernmental revenue is due to unbudgeted reimbursements received from the County for CARES Act funding. The increase in charges for services is due to an increase in fire inspection revenue and tuition revenue for the Coral Springs Regional Institute of Public Safety. Expenditures increased by $0.9 million due primarily to an increase in salary and benefits. The fund balance for the American Rescue Plan Fund increased by approximately $11,000 due to interest earnings on funds received from the Federal government during the last quarter of the fiscal year. The deficit fund balance for the Grants Fund will be eliminated once the City receives reimbursement from grantor agencies. The fund balance for the Special Obligation Bond Series 2020 Fund increased due to the issuance of $22.1 million Special Obligation Bonds offset by expenditures for the design and construction of the Westside campus and Fire Station 64 campus.

Proprietary Funds

The City’s Proprietary Funds include the City’s Enterprise Funds – Water and Sewer Fund, Stormwater Fund, and the Solid Waste Fund. An Enterprise Fund is used to account for activities for which a fee is charged to external users for goods and services. These funds provide the same type of information found in the government-wide financial statements, but in more detail.

• Unrestricted net position of the Water and Sewer Fund, Stormwater Fund and the Solid Waste Fund at the end of the current fiscal year totaled approximately $17,597,000, $2,686,000 and $1,046,000, respectively. • The operating income for the Water and Sewer Fund, Stormwater Fund and the Solid Waste Fund was approximately $2,963,000, $2,352,000 and $213,000, respectively.