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6.1 B - Attachment No. 4 MANAGEMENT'S DISCUSSION AND ANALYSIS Notes to the Financial Statements Notes to the Financial Statements 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 may be found on pages 29-62 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net assets may over time serve as a useful indicator of the City's financial position. The City's assets exceeded liabilities by$405.6 million at June 30,2009. City's Net Assets(in Millions) Governmental Business-type Activities Activities Total 2009 2008 2009 2008 2009 2008 Variance $ $ $ $ $ $ Cash and investments 125.737 129.434 48.134 53.786 173.871 183.220 -5.103% Other assets 29.126 33.391 27.988 25.066 57.114 58.457 -2.297% Capital assets 216.760 214.032 154.815 163.231 371.575 377.263 -1.508% Total assets 371.623 376.857 230.937 242.083 602.560 618.940 -2.646% Long-term debt outstanding 76.223 77.324 82.972 84.789 159.195 162.113 -1.800% Other liabilities 32.112 29.545 5.569 6.692 37.681 36.237 3.985% Totalliabilities 108.335 106.869 88.541 91.481 196.876 198.350 -0.743% Net assets: Invested in capital assets, net of debt 161.627 156.560 81.617 78.786 243.244 235.346 3.356% Restricted 52.369 50.323 5.548 5.786 57.917 56.109 3.222% Unrestricted Other unrestricted net assets 49.292 63.105 55.231 66.030 104.523 129.135 -19.059% Total net assets 263.288 269.988 142.396 150.602 405.684 420.590 -3.544% The largest portion (60%) of the City's net assets reflects its capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to residents; accordingly,these assets are not available for future spending. Although the City's investment in 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. An additional portion of the City's net assets (14%)represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets($104.52 million)may be used to meet the government's ongoing obligations(although portions of these unrestricted net assets may by law or contract be only used for specified purposes and may not necessarily be used for any general governmental purpose)to residents and creditors. At the end of the current fiscal year,the City is able to report positive balances in all three categories of net assets, 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. The City's net assets decreased by$15 million during the current fiscal year. 6