Nobles Soil and Water Conservation Disrict

Nobles swcd Annual reports and plans

 

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

 

The Nobles Soil and Water Conservation District’s discussion and analysis provides an overview of the District’s financial activities for the fiscal year ended December 31, 2007.  Since this information is designed to focus on 2007 activities, resulting changes, and currently known facts, it should be read in conjunction with the Nobles SWCD’s financial statements beginning on page 10.

 

FINANCIAL HIGHLIGHTS

 

· The Nobles Soil and Water Conservation District’s total net assets from governmental activities increased 11% from 2006 to 2007.                                                                      .

The Nobles SWCD’s revenues generated from governmental programs and charges for services were $10,201 less than the $259,678 in expenditures, but this was due mainly to capital purchases that were made, and is shown in the increase of total net assets.

 

The capital assets increased from $16,541 in 2006 to $48,412 in 2007 due to the capital purchases of district equipment.

 

The intergovernmental revenue increased by $30,074 from the budgeted income due to the NRCS offering a contribution agreement for work completed for them by the Nobles SWCD and also the State of Minnesota’s Farm Bill program funding.

 

USING THIS ANNUAL REPORT

 

This annual report consists of three parts:  management’s discussion and analysis (this section), the basic financial statements, and required supplementary information.  The basic financial statements include a series of financial statements.  The Statement of Net Assets and the Statement of Activities (on pages 10 and 11) provide information about the activities of the SWCD as a whole and present a longer-term view of the SWCD’s finances.  Fund financial statements also appear on pages 10 and 11.  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 Nobles SWCD has elected to present in this format.

 

The Statement of Net Assets and the Statement of Activities

 

Our analysis of the Nobles SWCD as a whole begins on page 6.  One of the most important questions asked about the SWCD’s finances is, “Is the Nobles 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 this 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 2007 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.  One 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.  One would need to consider other nonfinancial factors, however, to assess the overall health of the Nobles SWCD.

 

In the Statement of Net Assets and 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.

 

Reporting the Nobles SWCD General Fund

 

Fund Financial Statements

 

Our analysis of the SWCD’s general fund begins on page 8.  The fund financial statements begin on page 10 and provide 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 how 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 to determine whether there are 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 the governmental funds in reconciliations included with the financial statements.

 

THE NOBLES SWCD AS A WHOLE

 

The SWCD’s combined net assets were increased from $220,111 in 2006 to $243,064 in 2007.  Looking at the net assets and net expenses of governmental activities separately, however, two very different stories emerge.  Our analysis below focuses on the net assets (Table 1) and changes in net assets (Table 2) of the Nobles SWCD governmental activities.

 

Table 1

Net Assets

 

                                                                                                             Governmental

                                                                                                                       Activities

                                                                                                                                                                     

                                                                                           2007                                               2006

                 Current and other assets                                    289,914                                                     313,840

                 Capital assets                                                        48,412                                                     16,541     

                     Total assets                                                  $ 338,326                                                     $ 330,381

                 Long-term debt outstanding                                 6,020                                                     7,304

                 Other liabilities                                                      89,242                                                    101,472

                      Total liabilities                                            $ 95,262                                                     $   108,776

                 Net assets

                       Invested in capital assets,

                          net of debt                                                      48,412                                                    16,541

                       Unrestricted                                                     194,652                                                    203,570

              Total net assets                               $ 243,064                                                    $ 220,111

 

Net assets of the SWCD's governmental activities increased by 12 percent ($220,111 compared to $243,064).  Unrestricted net assets, the part of net assets that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation or other legal requirements, changed from a $203,570 surplus at December 31, 2006, to $194,652, at the end of this year.

 

The change in unrestricted governmental net assets declined primarily because in 2007, Nobles SWCD intergovernmental revenue and charges for services categories decreased.  The intergovernmental revenue decreased by $27,299 due to the following factors:  

1) despite receiving a $9,280 Federal contribution agreement from NRCS that was not budgeted, in 2006 the Federal contribution agreements were $19,672.00; 2) despite a State Farm Bill contribution of $6,300 in 2007, the farm bill agreement received in 2006 was $19,000 and 3) the Okabena Ocheda Watershed hired an administrator and decreased their SWCD services funding to the Nobles SWCD from $23,000 in 2006 to $3,250 in 2007.  The charges for services revenue decreased by $9,750 primarily due to decreased tree program and tree matting revenues.

 

Table 2

Changes in Net Assets

                                                                                                     Governmental

                                                                                                                            Activities

                                                                     2007                            2006

                                 Revenues

                                 Program revenues:

                                      Charges for services                                        33,703      43,453

                                      Intergovernmental Revenue                         188,402      215,701

                                      Misc. Rev.-Interest                                          10,445      10,292

                                      Misc. Rev.-Other                                              16,926      3,907

                                           Total Revenues                                        $ 249,476      $ 273,353

                                 Program Expenses

                                      Personal Services                                           118,899      135,245

                                      Other Services & Charges                              34,083      31,644

                                      Supplies                                                                1,212     1,290

                                      Capital Outlay                                                   41,674

                                      Project Exp-District                                          31,839     26,514

                                      Project Exp-State, Co., SWCD                      31,970      40,268

                                           Total Expenses                                        $ 259,678      $ 244,254

 

     Increase (Decrease) in net assets                                          $(10,201)     $29,099

 

The SWCD’s total revenues, excluding special items, decreased 9 percent.  The Miscellaneous Revenue-Other actually increased $13,019 due to several factors of which two were the sale of a district pick-up and an ATV.  Our analysis below separately considers the operations of governmental activities.

 

Governmental Activities

 

Revenues for the Nobles SWCD governmental activities decreased by 22 percent ($9,750), and total expenses increased 17 percent ($5,325).  This compares to a 14% increase in net assets in 2006. 

 

The cost of all governmental activities in 2007 was $228,873 compared to $246,215 in 2006.  However, as shown in the Statement of Activities on page 11, the amount that our taxpayers ultimately financed for these activities through County and State allocations was only $150,871.00, because some of the cost was paid by District charges for services or by other local intergovernmental revenues that subsidized certain programs with grants and contributions.  Overall, the Nobles SWCD’s governmental program revenues, including intergovernmental revenue and fees for services decreased in 2007, from $273,353 to $228,873.00, principally based on decreases in intergovernmental federal and intergovernmental state grants.  The SWCD paid for the remaining “public benefit” portion of governmental activities with other revenues, such as interest earnings.

 

Table 3 presents the cost of the SWCD’s four largest programs which are grouped under the Conservation category: tree program, cost-share program, grass drill program, and education program.  The net cost (total cost less revenues generated by the activities) shows $0 on Table 3 because employee’s wages and other district expenses are not figured into the total.

 

Table 3

Governmental Activities

 

                                                                            Total Cost                                                     Net Cost

                                                                             of Services                                                    of Services___

                                                                2007                          2006                                 2007                     2006    

 

                 Conservation                      33,051                                   38,482                          0                            0

                 Other                                    34,084                                   23,480                          0                            0

                    Totals                           $ 67,135                                   $ 61,962                       0                            0

 

 

THE FUNDS

 

As the SWCD completed the year, its general fund, as presented in the balance sheet on page 10, reported a combined fund balance of $200,672, which is less than last year’s total of $203,569.  The primary reasons for the General Fund’s deficit mirror the governmental activities analysis highlighted on pages 7 and 8.

 

General Fund Budgetary Highlights

 

In the Nobles SWCD 2007 budget the actual charges to appropriations (expenditures) were $22,326 above the budget amounts.  The most significant positive variance occurred in the Nobles SWCD’s, intergovernmental revenue, where the federal and state programs were both over budget.

 

Due to the capital purchases, resources available for appropriation were below the final budgeted amount.  State funding also affected grant resources available for appropriation. 

 

CAPITAL ASSET AND DEBT ADMINISTRATION

 

Capital Assets

 

At the end of 2007, the SWCD had $48,412 invested in a broad range of capital assets, including building improvements, vehicles and equipment.  (See Table 4 below).  This amount represents a significant net increase (including additions and deductions) of over $31,871.00, or 90% over last year

 

Table 4

Capital Assets at Year-end

                                                                                                                Governmental

                                                                                                                        Activities

                                                                                                          2007                   2006

                                         Leasehold Improvements                                          0                 2,595

                                         Vehicles                                                             29,124                 8,470

                                         Equipment                                                         19,288  6,568

                                                                                                                   $48,412  $17,633

                  This year’s major additions included:

                  2008 Chevrolet Pick-up                    27,654.00

                  Sharp Photocopier                               6,377.00

                  Great Plains Grass Drill                     9,760.00

 

Long-Term Liabilities

 

The Nobles SWCD has obligations that include accrued vacation pay, but currently has no outstanding notes.   More detailed information about the SWCD’s long-term liabilities is presented in Note II C to the financial statements.

 

 

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

 

The Nobles SWCD’s elected and appointed officials considered several factors when setting the fiscal-year 2008 budget and fees that will be charged for the business-type activities.  Revenue from the tree program is expected to be down again this year, but the District plans to seek revenues through additional grants.

 

 

CONTACTING THE NOBLES SWCD’S FINANCIAL MANAGEMENT

 

This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the SWCD’s finances 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 Nobles Soil and Water Conservation District, 1567 McMillan St., Suite 3, Worthington, MN  56187 at 507-376-9150, extension #3.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BREAKDOWN OF COUNTY REVENUE

2007

COUNTY REVENUES (breakdown):

ANNUAL ALLOCATION                                 $  50,000.00

WATER PLAN MONEY                                   $    1,350.00

WETLAND MONEY                                          $  10,000.00

FEEDLOT MONEY                                            $           0.00

ABANDONED WELL                                        $           0.00

DNR SHORELAND                                            $           0.00

OTHER                                                                   $           0.00

 

 

TOTAL                                                                   $   61,350.00   

 

NOTE:            The total should agree with amount reported as County Revenue in the "Budgetary Comparison Schedule."

 

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Nobles SWCD 2007 Annual Report

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