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<br />I gg <br /> <br />ERNST & ERNST <br /> <br />I <br /> <br />2100 TOWER-LIFE BUILDING <br /> <br />SAN ANTONIO, TEXAS 7820S <br /> <br />April 10, 1967 <br /> <br />Honorable Mayor, City Councilman, and City Manager <br />City of San Marcos <br />Post Office Box 725 <br />San Marcos, Texas <br /> <br />Gentlemen: <br /> <br />I <br /> <br />The audited financial statements of the City of San Marcos for the period <br />of eighteen months ended December 31, 1966, indicate that the City is at a point <br />which requires close attention to all aspects of fiscal management. In both the <br />General Fund and the Utility Fund, operating cash was low and liabilities with <br />short maturities were high last December 31. We have no doubts that you are <br />fully aware of the City's financial condition, for we have worked with the mayor <br />and the city manager to determine long-range borrowing requirements. We do, how- <br />ever, want to give you some facts which will help you understand the trends which <br />led to the tight position at year end. To assist in this presentation, we have <br />attached statements of source and use of cash for the General Fund and the Utility <br />Fund. These statements cover the period from April 1, 1963, to December 31, 1966, <br />or three years and nine months. <br /> <br />Practically all governmental functions of the City are accounted for in <br />the General Fund whereas the City's enterprise function of providing water and <br />sewer services is accounted for in the Utility Fund. For this reason, we are not <br />commenting on the Bond Fund or the Cemetery Perpetual Care Trust Fund. The two <br />major funds discussed provide services and support to each other, but the Utility <br />Fund normally transfers cash to the General Fund for general operations. Certain <br />services for administration are charged by the General Fund to the Utility Fund. <br />Because of this close relationship and to eliminate the effects of interfund <br />accounts, the following summary presents the combined source and use of cash to <br />show how the City's cash has been derived and used in the three-year and nine-month <br />period: <br /> <br />Operating revenue, including property taxes <br />Less operating expenditures, including retirement <br />of general obligation bonds <br /> <br />$2,526,959 <br /> <br />2.430.500 <br />$ 96,459 <br /> <br />I <br /> <br />Operating expenditures item which required no cash - <br />depreciation <br />Federal and other grants in aid of utility <br />construction <br /> <br />119,217 <br /> <br />CASH FROM OPERATIONS AND GRANTS <br /> <br />$ <br /> <br />59.263 <br />274,939 <br /> <br />_1 ,. <br />\_t I:V <br />