The city of Lawrence’s finances are solid, but some of the equipment that city employees use for their jobs may be a little less so, according to a new report out of City Hall.

An annual “financial indicators” report prepared by the city’s auditor found Lawrence city government is collecting more revenue per capita than it has in recent years, but is still having a hard time keeping up with some expenses, especially replacing aging equipment.

The report by City Auditor Michael Eglinski compared Lawrence with 14 other similar cities. It found, by at least one measure, Lawrence ranked last among peer cities when it comes to replacing machinery and equipment — everything from backhoes to lawn mowers to pickup trucks.

“There are a lot of things that management and the commission have to pay attention to, and this is one issue that likely should be on the list,” Eglinski said.

But Eglinski’s analysis also found the city is doing better when it comes to keeping up with its aging infrastructure, such as roads, bridges and city buildings. If the city had to pick between infrastructure and equipment, Eglinski said, there are good reasons why the city would want to focus on infrastructure.

“You would rather have old pickup trucks than old bridges,” Eglinski said. “They’re still easier to replace.”

City Manager David Corliss said he would like to see the city improve in both areas. In his written response that is filed with the report, he said it is “clearly important to highlight the increasing gap in attending to our equipment needs.” He said a new infrastructure sales tax approved by voters in 2008 will help the city replace aging fire and medical equipment and outdated public safety radios.

Much of that sales tax is for road improvements. Corliss said he thinks the city can do more in that area, too. Eglinski’s report noted that the city’s debt per capita reached its lowest levels of the last seven years — although the numbers don’t yet include $18 million in new debt the city will issue to expand the Lawrence Public Library. Corliss, though, said he doesn’t think the falling debt levels are necessarily a good sign.

“We are investing less in our community infrastructure through debt issuances than we did in the 1990s and 2000s,” Corliss wrote. “I do not believe this is a good trend, even if it helps with our financial indicators.”

Other findings from the report include:

• Governmental revenues soared in 2010, up about 18 percent, but much of that increase was attributed to the city receiving $8.5 million in trust fund money to clean up the former Farmland Industries site in east Lawrence. Eglinski, though, noted tax collections also increased from $48.9 million in 2009 to $51.8 million in 2010 — an increase of 5.9 percent. Part of that increase is related to the 2008 infrastructure sales tax because 2010 was the first full year’s worth of collection for that tax. Governmental revenue per capita is at about $800 per person.

• Governmental expenses were up about 11 percent in 2010. Per capita expenditures are now at about $900 per person, up from a low of a little less than $800 per person in 2008. The city is able to have expenditures per person higher than revenues per person largely because the city has been spending down a large fund balance — or a savings account — that it has in its bond and interest fund. The city in 2010 used about half of the $16 million fund to pay off city debt rather than raise property taxes to pay for the debt.

• The city’s enterprise operations — city services that charge fees and are designed to function like a business — had mixed results in 2010. Eglinski looks at each fund and determines whether it is operating at a “profit” or a loss and — unlike the city’s budget — factors in any appreciation or depreciation in assets the department has experienced. For example, if a city department saw its revenues exceed its expenses by $100,000 but saw the value of its equipment depreciate by $200,000, it would be listed as losing $100,000 — with the idea that the city eventually will have to replace the value of that equipment. Here’s how the city’s enterprise funds fared under that analysis:

1. Water and sewer fund: $4 million profit, which was up from $3.2 million in 2009 but is down from $6.6 million in 2006.

2. Solid waste and trash collection: $799,881 profit, which is up from a $30,000 loss in 2009 and far better than a $746,000 loss in 2008. Eglinski said there had been a slight increase in revenue for trash service, but that most of the improvement had come from cost-cutting in the department.

3. Parking fund: $167,204 loss, which is an improvement from a $286,000 loss in 2009. Eglinski noted that most of the other cities that he reviewed, if they had a parking fund at all, had a profitable parking fund. Eglinski said the issue would need further study to determine why Lawrence’s parking fund is performing differently.

4. Stormwater fund: $1.2 million profit, which is an improvement from $1 million profit in 2010.

5. Golf fund: $217,717 loss, which is worse than a $96,595 loss in 2009.