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MA~~IAGEMENT'S DISCUSSION AND ANALYSIS
<br />As management of the City of Paris, we offer readers of the City of Paris, Texas' financial statements this narrative
<br />overview and analysis of the financial activities of the City of Paris for the fiscal year ended September 30, 2007. We
<br />encourage readers to consider the information presented here in conjunction with additional information that we have
<br />furnished in our letter of transmittal as well as the City's financial statements.
<br />Financial Highlights of the Primary Government
<br />• From its peak of .695 cents per $100 in value in the 2003-04 fiscal year, the City has worked to lower its tax rate
<br />to .59225 for the year covered by this report: fiscal year 2006-07. With the start of fiscal year 2007-08, the City
<br />lowered its rate again to .56 cents per $100 in property value. The City has accomplished this by strict review of its
<br />operational needs and increases to the taxable value of property within the City.
<br />• The number of budgeted positions has dropped from 369 in fiscal year 2002-03 to 315 in fiscal year 2006-07. This
<br />reduction was also part of an operational review and represents a significant and annually repeating savings to the
<br />City.
<br />• Between the years 2001 and 2004 City-wide expenses exceed City-wide revenues by $4,478,546. Since that time
<br />(2005-2007), City-wide revenues have exceeded City-wide expenses by $8,381,379. The City has made a
<br />concentrated effort to reduce expenses while seeking new sources of revenue. The financial turn around from these
<br />efforts have yielded impressive results.
<br />• Taking advantage of the increase in its General Fund reserves, the City Council authorized a transfer to the Capital
<br />Projects Fund in the amount of $794,239 for the City to set up a computer aided dispatch-mobile data wireless
<br />network. This project will completely modernize this communication area of our emergency services departments
<br />(Police, Fire, and EMS) and offers opportunity for use by other departments.
<br />• The assets of the City of Paris exceeded its liabilities at the close of the most recent fiscal year by $75,521,643(net
<br />assets) an increase of $2,980,244 or 4.10% over the previous .year amount of $72,541,399. Of the amount known
<br />as net assets, $18,875,035 (unrestricted net assets) may be used to meet the government's ongoing obligations to
<br />citizens and creditors.
<br />• As of the close of the current fiscal year, governmental funds reported combined ending fund balances of
<br />$14,229,200 compared to $10,976,111 the previous year. This amounts to an increase of $3,253,089 or 29.63%.
<br />While the overall combined ending fund balances for governmental funds increased, the unreserved portion of
<br />those fund balances was $12,586,177 or an increase of $2,996,183 (30.38%) over the previous year amount of
<br />$9,859,994. Unreserved fund balance is available for spending at the government's discretion. The primary reason
<br />for the increase in fund balance was the improved cash position of the City.
<br />• At the end of the fiscal year, unreserved fund balance for the general fund was $11,581,136 or 63.65% of total
<br />general fund expenditures.
<br />• The City of Paris' non-current liabilities decreased by $2,955,282 or 7.20% during the current fiscal year. This
<br />decrease is consistent from year to year as the bulk of this decrease is due to payment of bonded debt that was set
<br />up on a level pay basis.
<br />• Total charges for services for the City of Paris were $17,218,686 compared to $17,776,211 the previous year.
<br />Operating/capital grants & contributions were $1,244,186 compared to $1,890,962 the previous year. Fewer grants
<br />have been available to the City over the last two years. General revenues were $18,152,717 compared to
<br />$17,095,017 the previous year.
<br />• There was a gain of $102,195 on the sale of Capital Assets.
<br />• $1,100,000 in transfers from business-type activities to governmental activities occurred during the year.
<br />• City-wide liabilities decreased $3,258,321 from $42,719,565 to $39,461,244. This amounted to 7.62%.
<br />• City-wide expenses increased $321,801 or .96%.
<br />• The ratio of net assets to expenses was 217.59% for the year 2005-06 and 224.35% for the year 2006-07 while
<br />unrestricted net assets changed from $15,901,209 in 2005-06 to $18,875,035 in 2006-07 an increase of 18.70%
<br />reflecting the City's improved cash position.
<br />• The ratio of city-wide debt service to total expenditures was 6.97% for the year OS-06 and 7.73% for the year
<br />2006-07.
<br />• Net debt to assets, a measure of solvency, was 35.60% in 2005-06 and 33.11% in 2006-07.
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