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CITY OF PEQUOT LAKES, MINNESOTA
<br />MANAGEMENT’S DISCUSSION AND ANALYSIS
<br />DECEMBER 31, 2019
<br />8
<br />THE CITY AS A WHOLE (Continued)
<br />The total cost of all programs and services decreased by $88,110 (3.07 percent). The most significant factor driving this decrease
<br />was the decrease in parks and recreation expenditures recognized in the Governmental Funds, along with an decrease in water
<br />program expenses.
<br />Our following analysis separately considers the operations of governmental and business-type activities.
<br />Governmental Activities
<br />Revenue for the City’s governmental activities decreased by $5,440,978 (67.93 percent), primarily due to the decrease in capital
<br />grants and contributions previously discussed. Total expenses decreased $42,082 (1.71 percent), largely due to decreased parks
<br />and recreation expenditures in the current year.
<br />Table 3 presents the cost of each of the City’s programs (general government, public safety, public works, parks and recreation,
<br />economic development and debt service)-as well as each program’s net cost (total cost less revenues generated by the activities).
<br />The net cost shows the financial burden that was placed on the City’s taxpayers by each of these functions. Activities (net of
<br />capital outlay which is excluded from Table 3) were generally comparable to the prior year as operations remained fairly
<br />consistent with the prior year, with the exception of:
<br />Public works net cost of services increased due to the State and County contributions previously discussed.
<br />Parks and recreation net cost of services decreased due to decreased expenses for park improvements in the current year.
<br />Economic Development net cost of services decreased primarily due to decreased professional service costs in the current
<br />year.
<br />Table 3
<br />Governmental Activities
<br />Total Cost Net Cost (Revenue)
<br />of Services of Services
<br />2019 2018 2019 2018
<br />General Government 553,679$ 538,889$ 473,119$ 467,171$
<br />Public Safety 1,009,623 1,016,110 622,371 629,801
<br />Public Works 703,577 594,661 693,245 (5,001,836)
<br />Parks and Recreation 72,361 180,722 51,889 169,824
<br />Econonmic Development 53,484 100,705 53,484 100,705
<br />Debt Service 19,146 22,865 19,146 22,865
<br />Totals 2,411,870$ 2,453,952$ 1,913,254$ (3,611,470)$
<br />Business-type Activities
<br />Revenues of the City’s business-type activities (see Table 2) increased by $48,501 (7.74 percent) and program expenses decreased
<br />by $46,028 (11.13 percent). The increase in revenues is due primarily to the increase in investment income. The decrease in
<br />expenses is due to the decrease in professional services costs in the Water Fund.
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