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CITY OF NEW BRIGHTON, MINNESOTA December 31, 2013 18 As management of the City of New Brighton, we offer readers of the City of New Brighton financial statements this narrative overview and analysis of the financial activities of the City of New Brighton for the fiscal year ended December 31, 2013. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the Introductory Section of this report. Financial Highlights The assets of the City of New Brighton exceeded its liabilities at the close of the most recent fiscal year by $ 67,694,137 (net position). Of this amount, $ 14,298,565 (unrestricted net position) may be used to meet the position decreased by $ 6,954,632. As of the close of the current fiscal year, the City of New Brighton governmental funds reported combined ending fund balances of $ 43,345,185, an increase of $ 14,861,062 in comparison with the prior year. Approximately 64.4% of this total amount, $ 27,926,917, is available for spending discretion. At the end of the current fiscal year, unassigned fund balance for the General Fund was $ 6,071,022, or 53.6% of total General Fund expenditures. The City of New Brighton total bonded debt decreased by $ 4,785,000 (10.0%) during the current fiscal year due to principal payments. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of New Brighton basic financial statements. The City of New Brighton basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of New Brighton finances, in a manner similar to a private -sector business. The statement of net position presents information on all of the City of New Brighton assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of New Brighton is improving or deteriorating. The statement of activities position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of New Brighton that are principally supported by taxes and intergovernmental revenues (governmental 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 of New Brighton include general government, community development, parks and recreation, public safety, and public works. The business-type activities of the City of New Brighton include the operation of water, sewer and stormwater utilities, street light system, and the golf course. The government-wide financial statements include not only the City of New Brighton itself (known as the primary government), but also a legally separate New Brighton Economic Development Authority (EDA) for which the City of New Brighton is financially accountable. The EDA functions for all practical purposes as a department of the City of New Brighton, and therefore has been included as an integral part of the primary government. The government-wide financial statements can be found on Statements 1 and 2 of this report.