MARTIN SOIL AND WATER CONSERVATION DISTRICT

MANAGEMENT DISCUSSION AND ANALYSIS

The Martin Soil and Water Conservation District’s discussion and analysis provides an overview of the SWCD’s financial activities for the year ended December 31, 2009.  Since this information is designed to focus on the current year’s activities, resulting changes, and current known facts, it should be read in conjunction with the Transmittal Letter and the SWCD’s financial statements.

USING THIS ANNUAL REPORT

This annual report consists of three parts:  management’s discussion and analysis, the basic financial statements, and required supplementary information.  The basic financial statements include a series of financial statements.  The State of Net Assets and the Statement of Activities provides information about the activities of the SWCD as a whole and presents a longer-term view of the SWCD;’s finances.  Fund financial statements start on the next page.  For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending.  Fund financial statements also report the SWCD’s operations in more detail than the government-wide statements by providing information about the SWCD’s most significant funds.  Since SWCD’s are single-purpose special purpose governments they are generally able to combine the government-wide and fund financial statements into single presentations.  The Martin SWCD has elected to present in this format.

The Statement of Net Assets and the Statement of Activities

Our analysis of the SWCD as a whole begins with the Statement of Net Assets and Governmental Fund Balance Sheet.  One of the most important questions asked about the SWCD’s finances is, “Is the SWCD as a whole better or worse off as a result of the year’s activities?”  The Statement of Net Assets and the Statement of Activities report information about the SWCD as a whole and about its activities in a way that helps answer this question.  These statements include all assets and liabilities using accrual basis of accounting, which is similar to the accounting used by the most private-sector companies.  All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report the SWCD’s net assets and changes in them. You can think of the SWCD’s net assets – the difference between assets and liabilities – as one way to measure the SWCD’s financial health, or financial position.  Over time, increases or decreases in the SWCD’s net assets are one indicator of whether its financial health is improving or deteriorating.

In the Statement of Net Assets and the Statement of Activities, the SWCD presents Governmental activities.  All of the SWCD’s basic services are reported here.  Appropriations from the county and state finance most activities.

THE SWCD’s FUNDS

As the SWCD completed this year, its general fund reported a combined fund balance of $153,664, which is below last year’s total of $157,672.  Included is this year’s total change in fund balance; is a decrease of $4,008. 

General Fund Budgetary Highlights

In comparing the actual to the budget, Clean Water Partnership Funds (CWP) was the largest variance in Intergovernmental Revenues.  The Blue Earth River CWP Project ended May 31, 2009.  Several projects were completed which resulted in the increase in revenue.  The deficit in the Personnel Services resulted from part-time employees hired to work on the LCCMR Program.  The budget was not revised to show those employees. 

Capital Assets and Debt Administration

At the end of 2009 the SWCD has invested in capital assets that included office furniture and a Sharp Projector.

Economic Factors and next year’s budgets and rates

The SWCD’s elected officials and staff considered many factors when setting the calendar year 2010 budget. The 2010 Revenues exceed Expenditures in the 2010 Budget by $11,259. The SWCD Board is attempting to keep expenditures as low as possible due to the uncertainty of the County budget situation. The State’s current financial situation is affecting Martin County. The District in 2010 took a voluntary 3% cut in revenues from the County.

CONTACTING ITHE SWCD’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers and customers with a general overview of the SWCD’s finances and to show the SWCD’s accountability for the money it receives.  If you have questions about this report or need additional financial information, contact the martin SWCD, 923 N. State Street. Suite 110, Fairmont, Minnesota 56031.  Telephone (507)235-6680.

Reporting the SWCD’s General Fund

Fund Financial Statements

Our analysis of the SWCD’s general fund begins with the Statement of Net Assets and Governmental Fund Balance Sheet. The fund financial statements begin on the next page and provide detailed information about the general fund – not the SWCD as a whole.  The SWCD presents only a general fund, which is a governmental fund.  All of the SWCD’s basic services are reported in the general fund, which focuses on what money flows into and out of those funds and the balances left at year-end that are available for spending.  The fund is reported using an accounting method called modified accrual accounting.  This method measures cash and all other financial assets that can be readily converted to cash.  The general fund statements provide a detailed short-term view of the SWCD’s general government operations and the basic services it provides.  Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the SWCD’s programs.  We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds in a reconciliation included with the financial statements.

THE SWCD AS A WHOLE

The Governmental Activities for 2008 and 2009 are included below

TABLE 1

                                                                        Governmental Activities

Current and other assets                                  276,249                       $302,828                                

Capital Assets                                                  19,098                                        14,426

Long-term debt outstanding                            14,180                                        16,156

Other liabilities                                                           118,577                         149,164        

Net Assets

  Invested in capital assets

            Net of debt                                          19,098                                        14,426

Total net assets                                                           $162,590                     $151,934

Net assets of the SWCD’s governmental activities decreased by $10,656 less than 1%.  Unrestricted net assets – the part of net assets that can be used to finance day-to-day operations without constraints by debt covenants, enabling legislation, or other legal requirements decreased  to $137,508, a decrease of $5,984.

TABLE 2

 Changes in Net Assets

                                                                        Governmental Activities

Revenues

Program Revenues:

            Charges for Services                            56,597               47,236

            Federal Grants                                     4,075                  7,323

            State Grants                                        101,868           203,903

            County Grants                                     124,787           127,952

            BERBI/GBERBA                                 3,741                            4,399

            CWP                                                    155,530           110,924

General Revenues

            Misc.                                                    30,232                 6,962

Total Revenues                                               $476,830         507,888

Total Expenses                                                            $475,797         511,896

Excess                                                             $1,033                (4,008)

Governmental Activities

Revenues for Martin SWCD’s governmental revenues increased by $31,058.  This increase was due to several grants (LCCMR, SWAG, East Fork Des Moines River CWP, Blue Earth River CWP) the district is administering.   The total cost of programs reflected this increased activity with grants, an increase in personnel expenses.  Even with the increase in revenues the Districts expenditures exceeded revenues by $4,008.