2002 Comprehensive Annual Financial Report

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was taking place. The underspending of the expenditures has to do with certain capital expenditures that did not take place in 2002, although the City plans that these projects will be start in 2003. Part of these saving also can be attributed to the fact that the City budgets at full staff and not all positions were filled in 2002. In all, this saving provides evidence that the City's budget has been prepared on a conservative basis, and has provided adequate resources to fund services provided. All cities have limited resources and, thus, limited number of programs and services that can be provided. We are proud to say that we have done well in terms of maintaining a solid, financially sound organization by spending within our means. Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for its governmental and business type activities at December 31, 2002 amounts to $246,809,669 (net of accumulated depreciatio )n . This investment in capital assets includes land, buildings, roads, improvements, service lines, automobiles and equipment, and street lights. A detailed notes of these cappital assets can be found in the Notes to the General Purpose Financial Statements (Note IV C). Major capital asset additions during the current fiscal year include the following: - Several ppolice and other vehicles were acquired for the General Government at cost of $1.8 mllion. -Major renovation to the Palais Royale ballroom at a cost of $5.9 million. - Various Park equipment and facilities upgrades at a cost of $570 thousand. - Northwest water tower installation at $ l . l million. Upgrade to Wastewater lagoon number one at $920 thousand Debt Administration. At December 31, 2002, the City had a number of debt issues outstanding. These issues included $2,085,000 of general obli ation bonds, $72,425,000 of revenue bonds payable from governmental funds $58,242,109 0~ revenue bonds pa able from enterprise funds and $1,453,247 of first mortgage ~ionds payable from governmental funds. Under the Indiana Constitution and state statute, the City's general obligation bonded debt issuances are subject to a legal limitation based upon 2% of total assessed value of real and personal property. Since Indiana's assessment statutes call for an assessed valuation of one-third of cost less depreciation, its general obligation debt limitation is one of the most conservative in the United States. A detailed listing of this debt can be found in the Notes to the General Purpose Financial Statements (Note IV G). A calculation of the City's legal debt limitation can be found in the statistical section of this document. Economic Factors and Next Year's Budgets and Rates As noted earlier, property taxes are the City's largest source of revenue. Under current legislation all Indiana cities must convert their assessed values from 33 %2 percent to 100 percent or market values in 2003. Under this new method all properties are being re-assessed to reflect the changes in values. Due to the current changes the City is anticipating that the 2003 tax distributions will be less than in previous due to tie fact that the potential for more appeals will be present. A new Sewer rate will be enacted in early 2003. The overall revenue enhancement with this rate increase will be 24 percent. These rates will be revised again in 2005 to assure that the municipal sewer system has sufficient revenue. One of the ma or capital pro ects in 2003 will be the renovation of the municipal service facility, (MSF), for $2~.5 million. ~e MSF houses all of the Police and part of the Fire departments. The renovation will convert this building into a. state of the art Police facility, while building a new facility for the Fire department central station. 10