Resolution No. 5176 - Laserfiche WebLink

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Management’s Discussion and Analysis The management of the City of Eugene, Oregon (City) presents this narrative overview to facilitate both a short and a long-term analysis of the financial activities of the City for the fiscal year ended June 30, 2016. This Management’s Discussion and Analysis (MD&A) is based on currently known facts, decisions, and conditions that existed as of the date of the independent auditor’s report. Additional information outside the scope of this analysis can be found in the Letter of Transmittal. Financial Highlights The City’s total assets and deferred outflows of resources at June 30, 2016 increased $3.4 million from $997.3 million to $1,000.7 million. The City’s total liabilities and deferred inflows of resources increased $26.9 million from $198.8 million to $225.7 million. The increase was primarily due an increase of $75.4 million in net pension liability offset by a $40.2 million decrease in deferred inflows of resources related to pensions. The net position of the City (assets less liabilities) at June 30, 2016 decreased $23.5 million from $798.6 million to $775.1 million. The City’s unrestricted portion of net position is $22.7 million. At June 30, 2016, the General Fund’s fund balance was $58.2 million, an increase of $17.2 million from the previous year. Of the General Fund’s fund balance $19.3 million is unassigned. The City’s pension liability at June 30, 2016 increased $105.9 million from a pension asset of $30.5 million to a pension liability of $75.4 million. The increase in the pension liability was the result of lower than projected investment earnings Moro on pension plan assets and the Oregon Supreme Court’s decision. The Court’s decision reversed a significant portion of the reductions that the 2013 Oregon Legislature made to future cost of living adjustments. The reversal increased the benefits projected to be paid compared to those developed in the prior actuarial valuation, and consequently increased the plan liabilities. Overview of the Financial Statements The following discussion and analysis is intended to serve as an introduction to the City’s basic financial statements and other required supplementary information. The City’s basic financial statements comprise three components: 1. Government-wide financial statements 2. Fund financial statements 3. Notes to the basic financial statements Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. 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 between the two reported as net position. The Statement of Activities presents information showing how the City’s net 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 result in cash flows in a future fiscal period. Examples of such items include earned, but uncollected property taxes, and earned, but unused compensated absences. Both of the government-wide financial statements distinguish functions of the City 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 include the following: Central services Fire and emergency medical services Library, recreation, and cultural services Planning and development Police Public works 15