Statement of Net Position

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) DECEMBER 31, 2021

This section of the City of Arvada’s Comprehensive Annual Financial Report provides readers with a narrative overview and analysis of the City’s financial performance during the fiscal year that ended on December 31, 2021 . We encourage readers to consider the information presented here in conjunction with the letter of transmittal at the front of this report, the City’s basic financial statements and notes to the financial statements, to enhance their understanding of the activities and financial health of the City of Arvada .

Overview of 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 consist of the following three components:

• Government-Wide Financial Statements • Fund Financial Statements • Notes to the Financial Statements

Required supplementary information is included throughout the report . Other supplementary information is also included at the end of the report .

Government-Wide Financial Statements The government-wide statements are designed to provide readers with a broad overview of the City’s finances using the accrual basis of accounting, the basis of accounting used by most private-sector businesses .

The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position . Over time, increases and decreases in net position may provide an indication of whether the City’s financial position is improving or deteriorating .

The statement of activities presents information reflecting how the City’s net position has changed during the fiscal year that just ended . All changes in net position are reported as soon as the underlying activity occurs . Thus, revenues and expenses are reported in these statements for some items that will only result in cash flows in future periods (e .g . uncollected taxes and earned but unused vacation leave) .

The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (government 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, public works, parks and recreation, culture and human service . The business-type activities of the City include water, wastewater, stormwater, golf and solid waste and recycling service .

The government-wide financial statements also include the Arvada Urban Renewal Authority as a discretely presented component unit of the City .

Fund Financial Statements Traditional users of the City’s financial statements will find the fund financial statement presentation more familiar .

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives . A major fund should generally meet both of the following criteria: 1) total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/ expenses are at least 10% of the corresponding total (assets and deferred outflows of resources, liabilities and deferred inflows of resources or expenditures/expenses) for that fund type (i .e . governmental or enterprise funds)