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CITY OF LARAMIE, WYOMING REPORT TO GOVERNANCE Resulting from the June 30, 2009 Financial Statement Audit ---PAGE BREAK--- Mader Tschacher Peterson & Co., LLC Certified Public Accountants & Consultants 1 December 1, 2009 To Honorable Mayor and Members of the City Council and City Manager City of Laramie, Wyoming We have completed our audit of the financial statements of City of Laramie, Wyoming for the year ended June 30, 2009. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. As part of our audit process, we evaluated the internal control structure and various policies and procedures in place. These observations gave us the opportunity to make recommendations and comments for positive changes in various areas of the City. During our audit, we also evaluated the overall financial performance of the City which we are detailing in this letter to management. Our evaluation is not designed to detect all control weaknesses or irregularities that may exist, and accordingly, we do not express on opinion on the internal controls of the City. Our report is presented in two sections for the Financial Analysis for the Governmental or Fund basis financial statements and for the Government-Wide Financial Statement presentation. FINANCIAL ANALYSIS On the following pages we graphically depict several aspects of your financial operations. The first part of this section represents the Fund Financial Statements of the City of Laramie summarized by the General Fund, the total Governmental Funds (which includes the General Fund) and the Enterprises Funds. The second part summarizes the Government Wide (full accrual) financial statements of the City of Laramie. The amounts have been rounded to the nearest $1,000 for ease of presentation and include the primary operations with regard to interfund transfers. This should illustrate your financial trends and help you better understand your financial status for the selected aspects of your overall financial positions. ---PAGE BREAK--- 2 DAYS OF OPERATIONS IN FUND BALANCE This graph shows the City of Laramie’s unreserved fund balance in the general fund compared to the annual expenditures of the general fund. This also provides a measurement of how many days the City of Laramie could operate on the unreserved fund balance: - 50 100 150 200 250 300 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 2005 2006 2007 2008 2009 Days of Operations in Reserve Unreserved Fund Balance (x1000) General Fund Expenditures (x1000) Days of operation in Reserve 2005 2006 2007 2008 2009 Unreserved Fund Balance (x1000) 11,041 $ 11,108 $ 15,674 $ 17,320 $ 16,996 $ General Fund Expenditures (x1000) 20,708 $ 19,038 $ 22,751 $ 23,426 $ 25,362 $ Days of operation in Reserve 195 213 251 270 245 This graph shows the City of Laramie’s unrestricted fund balance in the enterprise funds (Water Fund, Wastewater Fund and Solid Waste Fund) compared to the annual expenditures of the enterprise funds. This also provides a measurement of how many days the City of Laramie could operate the enterprise funds on the unrestricted fund balances: - 100 200 300 400 500 600 700 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 2005 2006 2007 2008 2009 Days of Operations in Reserve Unrestriced Fund Balance (x1000) Utility Fund Expenditures (x1000) Days of operation in Reserve 2005 2006 2007 2008 2009 Unrestriced Fund Balance (x1000) 7,887 $ 10,320 $ 13,636 $ 16,344 $ 15,792 $ Utility Fund Expenditures (x1000) 7,891 $ 9,014 $ 9,211 $ 9,356 $ 11,049 $ Days of operation in Reserve 365 418 540 638 522 ---PAGE BREAK--- 3 INTEREST EXPENSE This graph shows the trend of the City’s long-term debt and the interest expense on long-term debt for the governmental funds: 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 2005 2006 2007 2008 2009 Average Interest Rate Total Long-term Debt (x1000) Interest Expense on Debt (x1000) Percent Interest Expense on Debt 2005 2006 2007 2008 2009 Capital Leases Payable (x1000) 15,686 $ 13,759 $ 13,380 $ 11,327 $ 8,891 $ Loans Payable (x1000) 224 198 170 140 108 Total Long-term Debt (x1000) 15,910 $ 13,957 $ 13,550 $ 11,467 $ 8,999 $ Interest Expense on Debt (x1000) 630 559 483 533 84 Percent Interest Expense on Debt 3.96% 4.01% 3.56% 4.65% 0.93% This graph shows the trend of the City’s long-term debt and the interest expense on long-term debt for the enterprise funds: 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% $5,000 $10,000 $15,000 $20,000 $25,000 2005 2006 2007 2008 2009 Average Interest Rate Total Long-term Debt (x1000) Interest Expense on Debt (x1000) Percent Interest Expense on Debt 2005 2006 2007 2008 2009 Revenue Bonds Payable (x1000) 3,590 $ 3,360 $ 3,110 $ 2,850 $ 4,625 $ Capital Leases Payable (x1000) 2,454 2,016 1,537 1,039 819 Loans Payable (x1000) 14,799 13,975 13,223 12,868 10,500 Total Long-term Debt (x1000) 20,843 $ 19,351 $ 17,870 $ 16,757 $ 15,944 $ Interest Expense on Debt (x1000) 810 588 623 919 578 Percent Interest Expense on Debt 3.89% 3.04% 3.49% 5.48% 3.63% ---PAGE BREAK--- 4 FIVE YEAR TREND This graph shows the five year trend based on revenues, expenditures, and the fund balance for the General Fund: $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 2005 2006 2007 2008 2009 Revenues (x1000) Expenditures (x1000) Fund Balance (x1000) 2005 2006 2007 2008 2009 Revenues (x1000) 21,679 $ 23,708 $ 25,729 $ 27,806 $ 26,582 $ Expenditures (x1000) 20,708 19,038 22,751 23,426 25,362 Fund Balance (x1000) 11,041 $ 11,108 $ 15,374 $ 17,320 $ 16,996 $ This graph shows the five year trend based on revenues, expenditures, and the fund balance for all Governmental Funds (General Fund, Capital Construction Funds, Special Revenue Funds and the Debt Service Fund): $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 2005 2006 2007 2008 2009 Revenues (x1000) Expenditures (x1000) Fund Balance (x1000) 2005 2006 2007 2008 2009 Revenues (x1000) 28,984 $ 32,405 $ 35,580 $ 36,630 $ 35,282 $ Expenditures (x1000) 29,141 32,718 30,527 30,252 37,565 Fund Balance (x1000) 30,393 $ 28,942 $ 38,097 $ 46,106 $ 45,127 $ ---PAGE BREAK--- 5 This graph shows the five year trend based on revenues, expenditures, and the fund balance for all Enterprise Funds (Water Fund, Wastewater Fund, and the Solid Waste Fund): $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 2005 2006 2007 2008 2009 Total Revenue (x1000) Expenses (x1000) Fund Balance (x1000) 2005 2006 2007 2008 2009 Operating Revenues (x1000) 9,509 $ 10,546 $ 11,074 $ 11,632 $ 11,454 $ Nonoperating & Grant Revenue (x1000) 929 1,017 2,449 5,535 1,893 Total Revenue (x1000) 10,438 $ 11,563 $ 13,523 $ 17,167 $ 13,347 $ Expenses (x1000) 6,895 8,649 8,845 9,356 11,014 Fund Balance (x1000) 41,061 $ 43,860 $ 58,354 $ 66,247 $ 68,193 $ ---PAGE BREAK--- 6 GOVERNMENT-WIDE TRENDS The Government-Wide trends show the five year trends and summaries for the City of Laramie based on the full accrual financial statement reporting required with the implementation for GASB Statement No. 34. The trends are presented for the Governmental Activities and the Business-Type Activities. This graph shows the five year summary of the total assets, total liabilities and the net assets of the Governmental Activities: $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 2005 2006 2007 2008 2009 Total Assets (x1000) Total Liabilities (x1000) Net assets (x1000) 2005 2006 2007 2008 2009 Total Assets (x1000) 88,907 $ 95,949 $ 99,369 $ 106,894 $ 116,544 $ Total Liabilities (x1000) 29,710 27,728 28,313 25,805 25,585 Net assets (x1000) 59,197 $ 68,221 $ 71,056 $ 81,089 $ 90,959 $ This graph shows the five year summary of the total assets, total liabilities and the net assets of the Business-Type Activities: $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 2005 2006 2007 2008 2009 Total Assets (x1000) Total Liabilities (x1000) Net assets (x1000) 2005 2006 2007 2008 2009 Total Assets (x1000) 63,477 $ 65,102 $ 78,641 $ 86,039 $ 87,595 $ Total Liabilities (x1000) 22,417 21,242 20,287 19,792 19,402 Net assets (x1000) 41,060 $ 43,860 $ 58,354 $ 66,247 $ 68,193 $ ---PAGE BREAK--- 7 This graph shows the five year trend based on revenue and expenses for the Governmental Activities: $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 2005 2006 2007 2008 2008 Total Revenues (x1000) Expenses (x1000) Change in Net Assets (x1000) 2005 2006 2007 2008 2009 Program Revenues (x1000) 6,770 $ 6,863 $ 8,277 $ 8,413 $ 9,170 $ General Revenues (x1000) 24,726 29,100 30,120 30,885 28,989 Total Revenues (x1000) 31,496 $ 35,963 $ 38,397 $ 39,298 $ 38,159 $ Expenses (x1000) 20,882 25,506 37,014 30,728 28,226 Change in Net Assets (x1000) 10,614 $ 10,457 $ 1,383 $ 8,570 $ 9,933 $ This graph shows the five year trend based on revenue and expenses for the Business-Type Activities: $5,000 $10,000 $15,000 $20,000 $25,000 2005 2006 2007 2008 2008 Total Revenues (x1000) Expenses (x1000) Change in Net Assets (x1000) 2005 2006 2007 2008 2008 Program Revenues (x1000) 10,320 $ 11,354 $ 12,755 $ 16,562 $ 13,558 $ General Revenues (x1000) 118 323 10,735 687 (563) Total Revenues (x1000) 10,438 11,677 23,490 17,249 12,995 Expenses (x1000) 7,891 9,015 8,844 9,356 11,049 Change in Net Assets (x1000) 2,547 $ 2,662 $ 14,646 $ 7,893 $ 1,946 $ ---PAGE BREAK--- 8 DEBT RATIO This graph shows the ratio of long-term debt outstanding to the total assets for the Governmental Activities: 0.00% 5.00% 10.00% 15.00% 20.00% $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 2005 2006 2007 2008 2009 Ratio of Long-Term Debt to Total Assets Total Assets (x1000) Total Long-term Debt (x1000) Ratio of Debt to Total Assets 2005 2006 2007 2008 2009 Total Assets (x1000) 88,907 $ 95,949 $ 99,369 $ 106,894 $ 116,544 $ Total Long-term Debt (x1000) 15,910 $ 13,957 $ 13,550 $ 11,467 $ 9,718 $ Ratio of Debt to Total Assets 17.90% 14.55% 13.64% 10.73% 8.34% This graph shows the ratio of long-term debt outstanding to the total assets for the Business-Type Activities: 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% $20,000 $40,000 $60,000 $80,000 $100,000 2005 2006 2007 2008 2009 Ratio of Long-Term Debt to Total Assets Total Assets (x1000) Total Long-term Debt (x1000) Ratio of Debt to Total Assets 2005 2006 2007 2008 2009 Total Assets (x1000) 63,477 $ 65,102 $ 78,641 $ 86,039 $ 87,595 $ Total Long-term Debt (x1000) 20,843 $ 19,351 $ 17,870 $ 16,757 $ 15,944 $ Ratio of Debt to Total Assets 32.84% 29.72% 22.72% 19.48% 18.20%