RubinBrown Public Sector Stats 2014

A Publication of RubinBrown LLP ‘14 PUBLIC SECTOR STATS

Welcome

RubinBrown is pleased to present our 2014 Public Sector Statistical Analysis , our eighth annual survey of municipal statistical and financial information. This analysis has been created in order to provide a comprehensive report of key government-wide and governmental-fund financial statistics for the regions we serve so that city governments may compare how they are doing relative to other municipal governments in their region.

If you have questions about this publication, please contact us (see page 13 for contact information).

Contents 1 Executive Summary 4 Denver Metropolitan Area 6 Kansas City Metropolitan Area 8 St. Louis Metropolitan Area 10 Financial Ratio Interpretations 13 RubinBrown Public Sector Services Group

Executive Summary

The study includes results for municipalities in the Denver Front Range, Kansas City and St. Louis metropolitan areas.

All cities included in the data have populations greater than 5,000. Additionally, the cities of Denver, Kansas City and St. Louis are excluded from the study due to their size relative to the other municipalities. Finally, for purposes of this study, Denver consists of municipalities primarily in the Front Range region, metropolitan Kansas City includes municipalities in both Kansas and Missouri and metropolitan St. Louis includes municipalities in both Missouri and Illinois.

Methodology The RubinBrown Public Sector Services Group has a substantial practice in each of the three metropolitan areas and is a national leader in providing accounting and auditing services to governments. The financial information used to calculate the ratios contained in this survey was obtained from the finance officers of the participating municipalities. Financial information was collected from the 2013 fiscal year or calendar year Comprehensive Annual Financial Report (CAFR), or from the 2013 audited financial statements if no CAFR was prepared. All municipalities included in the study prepare financial statements in accordance with generally accepted accounting principles. Key financial ratios were calculated in three categories: government-wide (governmental activities only), governmental funds, and general fund information. Each participant in the survey received customized financial statistics to use as an analysis tool. This year, participation in all three regions remained consistent except for Denver where three cities were excluded because they were outside the Front Range region. A total of 32 Denver Front Range municipalities, 24 Kansas City municipalities and 41 St. Louis municipalities participated. Format of the Report The ratios are presented separately for the Denver, Kansas City and St. Louis regions. The average population of the cities included in the Denver region was 76,000. This compares to the average population of 46,000 for cities surveyed in the Kansas City region and 22,000 for those in the St. Louis region. In general, the St Louis area has more small cities than the other regions. For each ratio presented, the report presents information both by quartile and average. The computed values for each ratio were sorted from more favorable to less favorable and quartiles were determined. The quartile information is presented

Participating Municipalities by Region

Denver Region Arvada Aurora

Kansas City Region Belton Blue Springs Gardner

St. Louis Region Alton

Arnold Ballwin Brentwood Bridgeton Chesterfield Clayton

Boulder Brighton

Gladstone Grandview Harrisonville Independence Lawrence Leavenworth Leawood Lee’s Summit Lenexa Liberty

Broomfield Canon City Castle Rock Centennial

Collinsville Crestwood Creve Coeur Des Peres Edwardsville Ellisville Fairview Heights Fenton Ferguson Festus

Cherry Hills Village Colorado Springs Commerce City Englewood Erie Evans Golden Greeley Greenwood Village Lafayette Lakewood Littleton Ft. Collins Fountain

Merrian Mission North KC Olathe

Overland Park Prairie Village

Florissant Glendale Hazelwood Kirkwood Ladue

Raymore Raytown

Richmond Shawnee Warrensburg

Lone Tree Longmont

Lake St. Louis Manchester Maplewood Maryland Heights O’Fallon Olivette Richmond Heights Rock Hill Saint John Shrewsbury St. Charles St. Peters Sunset Hills Town and Country University City Webster Groves Weldon Spring

Louisville Loveland Northglenn Parker Thorton Westminster Wheat Ridge Windsor

Wentzville Wildwood

RubinBrown Public Sector Stats 2014 | 1

Executive Summary

by displaying the ratio value that separates each quartile. For a description and interpretation of the ratios, please refer to the “Financial Ratio Interpretations” section of the report. The conclusions reached as to which results are more or less favorable are based upon what is most commonly accepted in the industry while taking into consideration what the majority of cities are likely to believe. Each statistic may be viewed differently or may be more or less meaningful based upon each city’s situation. For example, a small city may view a large amount of funding being spent on public safety as favorable, whereas our analysis places this in a less favorable quartile. In addition, per capita ratios may be adversely affected if a city serves a large non-resident population due to a significant daily influx of workers.

Analysis The results of this year’s survey seem to indicate that 2013 was a year of continued growth, but at a much slower pace than in 2011 or 2012. After several years of decreases in tax and other revenues, these amounts increased as the economy began to rebound in 2011. During 2013 revenue growth slipped in some regions or increased at a slower pace in others while costs continued to grow at a increased pace compared to 2012. This has resulted in continued net asset growth for municipal governments, but at a slower pace as evidenced by the chart below. Fund balance of the general fund is a focal point of a city’s financial health, at least from a short-term perspective. Surprisingly, unrestricted fund balance, which includes assigned and unassigned fund balance categories as defined in GASB Statement No. 54, has remained relatively stable since 2009 as a percent of total revenues in the general fund, in spite of the economic downturn that has taken place during that time frame. In the analysis that follows, the results for each metropolitan area are examined, with an emphasis placed on the impact of current economic conditions upon each metropolitan area. Use of the Study Finance officers may use the study to determine how their cities compare to others of similar size and geographic area in key financial ratio measurements. Both quartile and average ratio values are provided for comparison. The finance officer may wish to share the results of the analysis with the municipality’s chief executive officer and governing body to help key officials understand the impact of decisions on the financial condition of municipality.

15% Average Change in Net Position (All Regions)

10%

5.2%

4.6%

3.2%

2.5%

5%

1.6%

0%

2009

2010

2011

2012

2013

Unrestricted General Fund Balance as a Percent of Revenue

70%

60.1%

59.2%

58.1%

60%

51.7%

50.0%

50%

40%

36.2%

35.7%

34.8%

32.9%

32.2%

34.0%

30%

33.0%

32.5%

30.9%

20%

10%

0%

2009

2010

2011

2012

2013

Kansas City

St. Louis

Denver

2 | RubinBrown Public Sector Stats 2014

Denver Metropolitan Area

The 2013 results for the municipalities surveyed in the Denver region indicate conditions that are similar to 2012. The average increase in net position for Denver municipalities was 3.0% in 2013, as compared with 2.9% in 2012. Of the 32 municipalities surveyed, only 6 (19%) reported a decrease in net position in 2013 as compared with the 14% of Denver municipalities that reported a decrease in net position in 2012. Tax revenue per capita for Denver municipalities increased 3% during the past year, from $897 per capita in 2012 to $925 per capita in 2013. Similarly, expenses per capita increased slightly from $1,187 in 2012 to $1,214 in 2013. Municipalities in the Denver region also have managed to maintain strong liquidity positions. The average liquidity ratio for these municipalities was 3.03 in 2013, an improvement over the average liquidity of 2.98 in 2012. Furthermore, 23 of the 32 Denver municipalities reported a liquidity ratio of 2.0 or greater. Finally, unrestricted fund balances in the general fund remain strong but have decreased slightly as a percent of revenues from 34% in 2012 to 33% in 2013.

United States Air Force Academy Cadet Chapel in Colorado Springs, Colorado

Tax Revenue Per Capita

Expenses Per Capita

$1,400

$1,400

$1,248

$1,100 $1,200 $1,300

$1,100 $1,200 $1,300

$1,214

$1,187

$1,141

$951

$1,000

$1,000

$925

$897

$872

$600 $700 $800 $900 $500 $400 $300 $200 $100

$600 $700 $800 $900 $500 $400 $300 $200 $100

$0

$0

2010

2011

2012

2013

2010

2011

2012

2013

4 | RubinBrown Public Sector Stats 2014

Financial Ratio Study for Denver Metropolitan Area Municipalities Fiscal Years Ending in 2013

INTO WHICH QUARTILE DOES YOUR MUNICIPALITY FALL? ◀ More Favorable Less Favorable ▶

First Quartile

Quartile Breakpoint

Second Quartile

Third Quartile

Quartile Breakpoint

Fourth Quartile

2013 Average

2012 Average

Median

GOVERNMENT-WIDE RATIOS

General Ratios

Change in net position as a percent of net position (%)

5.6%

2.9%

0.8%

3.0%

2.9%

Revenue coverage ratio (times)

1.17

1.10

1.02

1.10

1.08

Unrestricted net position as a percent of current year revenue (%) Accumulated depreciation as a percent of depreciable capital assets (%)

73.0%

41.1%

30.4%

51.1%

51.6%

36.8%

43.2%

48.6%

43.7%

43.6%

Liquidity Ratio

Liquidity ratio (times)

4.12

2.69

1.77

3.03

2.98

Debt Ratios

Debt to assets leverage ratio (times)

0.06

0.09

0.12

0.11

0.11

Total debt per capita ($ per citizen)

$192.65

$442.24

$968.64

$749.24

$745.99

Revenue Ratios

Tax revenue per capita ($ per citizen)

$656.40

$810.94

$1,094.70

$924.75

$897.12

Total grants, contributions & other intergovernmental revenue as a percent of total revenue (%)

10.9%

14.7%

19.2%

15.0%

14.3%

Expense Ratios

Total expense per capita ($ per citizen)

$923.35

$1,100.19

$1,461.89

$1,213.99

$1,186.62

Total general government (administration) expense per capita ($ per citizen) Total public safety expense per capita ($ per citizen) Total interest expense per capita ($ per citizen)

$152.95

$226.71

$298.17

$259.92

$248.77

$243.48

$344.78

$469.16

$374.29

$371.90

$4.88

$15.77

$47.41

$32.69

$30.46

GOVERNMENTAL FUND RATIOS

Expenditure Ratios

Total debt service expenditures as a percent of total revenue (%) Capital outlay expenditures as a percent of total expenditures (%)

2.6%

6.0%

8.9%

6.5%

6.8%

18.9%

13.6%

8.0%

14.5%

15.4%

GENERAL FUND RATIOS

Financial Position Ratio

Unrestricted fund balance as a percent of total revenue (%)

48.6%

32.8%

15.7%

32.9%

34.0%

Revenue Ratios

Intergovernmental revenue as a percent of total revenue (%) Transfers in as a percent of total revenue and transfers in (%)

3.6%

6.5%

9.9%

7.6%

7.4%

0.1%

1.8%

5.0%

4.8%

4.7%

RubinBrown Public Sector Stats 2014 | 5

Kansas City Metropolitan Area

The 2013 results for the Kansas City area indicate that growth has also slowed in comparison with 2012. The average increase in net position for Kansas City municipalities was 1.3% in 2013, as compared with 1.9% in 2012. Of the 24 municipalities surveyed, 7 (29%) reported a decrease in net position in 2013 and 2012. As illustrated in the tax revenue per capita chart, tax revenue for Kansas City municipalities remained fairly consistent: $773 in 2011, and $775 in 2012, but had a 2% increase to $792 in 2013. Meanwhile, as illustrated by the expenses per capita chart below, expenses per capita for Kansas City municipalities increased 8% from $1,101 in 2012 to $1,191 in 2013. Also, the liquidity of the Kansas City municipalities remains strong. The average liquidity ratio for Kansas City municipalities was 2.61 in 2013, which exceeds the average liquidity of 2.22 in 2012. Furthermore, 8 of the 24 Kansas City municipalities reported a liquidity ratio of 2.0 or greater in 2013 as compared to 10 in 2012. Five municipalities reported a liquidity ratio of 1.0 or less in 2013. Finally, unrestricted fund balances in the general fund remain strong but have decreased as a percent of revenues from 36% in 2012 to 32.5% in 2013.

Liberty Memorial in Kansas City, MO

Tax Revenue Per Capita

Expenses Per Capita

$1,400

$1,400

$1,100 $1,200 $1,300

$1,100 $1,200 $1,300

$1,191

$1,184

$1,156

$1,101

$999

$1,000

$1,000

$600 $700 $800 $900 $500 $400 $300 $200 $100

$600 $700 $800 $900 $500 $400 $300 $200 $100

$792

$775

$773

$765

$660

$0

$0

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

6 | RubinBrown Public Sector Stats 2014

Financial Ratio Study for Kansas City Metropolitan Area Municipalities Fiscal Years Ending in 2013

INTO WHICH QUARTILE DOES YOUR MUNICIPALITY FALL? ◀ More Favorable Less Favorable ▶

First Quartile

Quartile Breakpoint

Second Quartile

Third Quartile

Quartile Breakpoint

Fourth Quartile

2013 Average

2012 Average

Median

GOVERNMENT-WIDE RATIOS

General Ratios

Change in net position as a percent of net position (%)

3.0%

1.3%

-0.5%

1.3%

1.9%

Revenue coverage ratio (times)

1.06

1.01

0.95

1.01

1.06

Unrestricted net position as a percent of current year revenue (%) Accumulated depreciation as a percent of depreciable capital assets (%)

52.1%

30.7%

-18.9%

11.2%

7.7%

35.6%

42.3%

45.3%

42.0%

42.4%

Liquidity Ratio

Liquidity ratio (times)

2.67

1.71

1.40

2.61

2.22

Debt Ratios

Debt to assets leverage ratio (times)

0.10

0.21

0.39

0.26

0.33

Total debt per capita ($ per citizen)

$726.57

$1,097.98

$1,531.24

$1,073.41

$1,433.62

Revenue Ratios

Tax revenue per capita ($ per citizen)

$589.74

$661.41

$770.43

$791.73

$775.34

Total grants, contributions & other intergovernmental revenue as a percent of total revenue (%)

1.7%

4.7%

8.8%

6.6%

9.8%

Expense Ratios

Total expense per capita ($ per citizen)

$825.52

$1,011.30

$1,148.07

$1,190.74

$1,100.50

Total general government (administration) expense per capita ($ per citizen) Total public safety expense per capita ($ per citizen) Total interest expense per capita ($ per citizen)

$126.05

$147.92

$219.36

$196.51

$175.42

$282.95

$354.55

$446.65

$453.45

$406.82

$16.48

$57.98

$68.35

$55.05

$64.08

GOVERNMENTAL FUND RATIOS

Expenditure Ratios

Total debt service expenditures as a percent of total revenue (%) Capital outlay expenditures as a percent of total expenditures (%)

12.7%

15.7%

25.1%

26.3%

19.4%

25.8%

20.5%

12.6%

17.5%

18.3%

GENERAL FUND RATIOS

Financial Position Ratio

Unrestricted fund balance as a percent of total revenue (%)

45.6%

31.8%

21.9%

32.5%

35.7%

Revenue Ratios

Intergovernmental revenue as a percent of total revenue (%) Transfers in as a percent of total revenue and transfers in (%)

0.2%

1.2%

9.4%

5.2%

5.3%

0.7%

2.2%

6.4%

3.6%

4.8%

RubinBrown Public Sector Stats 2014 | 7

St. Louis Metropolitan Area

The 2013 results for the St. Louis area reflect a slowing down of the economic recovery as discussed previously. The average increase in net position for St. Louis municipalities was 3.2% in 2013, as compared with 4.7% in 2012 and 8.6% in 2011. Furthermore, 8 of the 41 St. Louis municipalities (19%) reported a decrease in government- wide net position in 2013, as compared with 12% in 2012. The cause of this slow down in the change in net position is evident when revenue per capita and expenses per capita are examined. As indicated in the chart below, revenue per capita for St. Louis municipalities increased from $924 in 2011 to $963 in 2012, and decreased to $928 in 2013. Per capita expenses decreased slightly for St. Louis area municipalities, from $1,164 in 2012 to $1,159 in 2013. This decrease in expenses is responsible for avoiding an even larger decline in the average increase in net position as discussed above. Additionally, St. Louis municipalities have managed to maintain sufficient liquidity to meet their ongoing financial needs. The average liquidity ratio for St. Louis municipalities in 2013 was 4.50, an increase from the 2012 average of 4.10. This certainly is a positive indicator for the region, as it demonstrates that area municipalities are well positioned to withstand short-term cash shortfalls. Indeed, 31 of the 41 participating St. Louis municipalities had a liquidity ratio of 2.0 or greater. Finally, unrestricted fund balances in the general fund remain strong. As a percent of revenue, balances are consistent in 2013 as compared to 2012 at approximately 60%.

Stan Musial Veterans Memorial Bridge in St. Louis, MO Photo by Chris Naffziger, Saint Louis Patina

Tax Revenue Per Capita

Expenses Per Capita

$1,400

$1,400

$1,100 $1,200 $1,300

$1,100 $1,200 $1,300

$1,164

$1,159

$1,130

$1,075

$963

$1,000

$1,000

$928

$924

$895

$853

$600 $700 $800 $900 $500 $400 $300 $200 $100

$600 $700 $800 $900 $500 $400 $300 $200 $100

$722

$0

$0

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

8 | RubinBrown Public Sector Stats 2014

Financial Ratio Study for St. Louis Metropolitan Area Municipalities Fiscal Years Ending in 2013

INTO WHICH QUARTILE DOES YOUR MUNICIPALITY FALL? ◀ More Favorable Less Favorable ▶

First Quartile

Quartile Breakpoint

Second Quartile

Third Quartile

Quartile Breakpoint

Fourth Quartile

2013 Average

2012 Average

Median

GOVERNMENT-WIDE RATIOS

General Ratios

Change in net position as a percent of net position (%)

7.4%

3.8%

1.2%

3.2%

4.7%

Revenue coverage ratio (times)

1.17

1.10

1.04

1.10

1.18

Unrestricted net position as a percent of current year revenue (%) Accumulated depreciation as a percent of depreciable capital assets (%)

56.6%

31.4%

-18.1%

-2.4%

-4.1%

37.9%

45.4%

50.1%

44.0%

43.7%

Liquidity Ratio

Liquidity ratio (times)

6.10

3.94

2.10

4.50

4.10

Debt Ratios

Debt to assets leverage ratio (times)

0.08

0.18

0.30

0.29

0.30

Total debt per capita ($ per citizen)

$188.19

$619.59

$1,266.53

$1,093.79

$1,300.85

Revenue Ratios

Tax revenue per capita ($ per citizen)

$628.49

$779.73

$1,009.24

$927.74

$963.43

Total grants, contributions & other intergovernmental revenue as a percent of total revenue (%)

3.9%

7.6%

12.8%

10.1%

12.7%

Expense Ratios

Total expense per capita ($ per citizen)

$780.82

$1,007.55

$1,271.22

$1,158.78

$1,163.87

Total general government (administration) expense per capita ($ per citizen) Total public safety expense per capita ($ per citizen) Total interest expense per capita ($ per citizen)

$96.70

$135.46

$203.47

$178.61

$186.51

$255.30

$385.97

$542.16

$451.09

$451.25

$11.91

$28.69

$65.06

$75.32

$74.27

GOVERNMENTAL FUND RATIOS

Expenditure Ratios

Total debt service expenditures as a percent of total revenue (%) Capital outlay expenditures as a percent of total expenditures (%)

5.2%

9.9%

14.8%

14.8%

15.2%

20.7%

14.6%

10.1%

15.7%

15.8%

GENERAL FUND RATIOS

Financial Position Ratio

Unrestricted fund balance as a percent of total revenue (%)

76.8%

51.1%

32.3%

60.1%

59.2%

Revenue Ratios

Intergovernmental revenue as a percent of total revenue (%) Transfers in as a percent of total revenue and transfers in (%)

0.0%

1.4%

9.4%

6.9%

6.7%

0.0%

0.3%

3.4%

2.1%

2.3%

RubinBrown Public Sector Stats 2014 | 9

Financial Ratio Interpretations

Key financial ratios are calculated for three major categories: government-wide (governmental activities only), governmental funds, and general fund.

GOVERNMENT-WIDE RATIOS Government-wide financial statements report information on all of the nonfiduciary activity of the government and its component units. The study focuses on governmental activities that are normally supported by taxes and intergovernmental revenues. The government-wide financial statements utilize the economic measurement flow and accrual basis of accounting. The measurement and timing of recognition is similar to that of a business entity.

General Ratios Change in net position as a percent of net position (%) Formula: Increase (decrease) in governmental activities net position Governmental activities net position, beginning of year Interpretation: The ratio measures the change in the municipality’s financial condition for the year. A positive ratio indicates that the financial condition has improved; a negative ratio indicates a deteriorating financial condition.

Unrestricted net position as a percent of current year revenue (%)

Formula: Governmental activities unrestricted net position Governmental activities current year revenue *

*Current revenue includes both program and general revenue but excludes gains, losses, contributions, special and extraordinary gains or losses and transfers. Interpretation: The ratio measures the ability of the municipality to operate if its normal revenue stream is temporarily interrupted or significantly impaired. The ratio is the measure of the cushion that the municipality has for bad years. Municipalities may set a target minimum value for this ratio. A higher ratio is usually considered favorable. However, an extremely high ratio may indicate that the municipality is not providing appropriate current services for its constituents based on its recurring revenue stream.

Revenue coverage ratio (times)

Formula: Governmental activities current year revenue * Governmental activities current year expense

*Current revenue includes both program and general revenue but excludes gains, losses, contributions, special and extraordinary gains or losses and transfers. Interpretation: The ratio measures interperiod equity – whether current year revenue covers the cost including depreciation of providing current year services. A ratio greater than 1.00 indicates positive interperiod equity; current year taxpayers are providing adequately for current year services. When the ratio falls below 1.00, either prior year revenues were used to fund a portion of current year services or future citizens are being burdened with some of the cost for providing services consumed currently. A higher value for the ratio is usually considered favorable. However, an extremely high ratio may indicate that the municipality is not providing services commensurate with the current revenues being generated from its tax base.

Accumulated depreciation as a percent of depreciable capital assets (%)

Formula: Governmental activities accumulated depreciation, end of year Governmental activities depreciable capital assets, end of year

Interpretation: The ratio is a measure of the relative age of depreciable capital assets compared to the assets’ economic lives. Lower ratios are considered to be more favorable; the municipality will not face significant replacement cost in the near future.

Liquidity Ratio Liquidity ratio (times)

Formula: Governmental activities liquid assets * Governmental activities current liabilities

*Cash and short-term investments, excluding any restricted assets. Interpretation: The ratio measures the municipality’s ability to meet current obligations from existing cash and short-term investment balances. A higher ratio is considered favorable indicating that the municipality will be able to pay current liabilities as they become due.

10 | RubinBrown Public Sector Stats 2014

Debt Ratios Debt to assets leverage ratio (times)

Expense Ratios Expense ratios measure the current-period cost of providing services to citizens or current-period financing cost. Functional expense categories include depreciation measuring the cost of using capital assets to provide current year services. Low ratios are depicted as favorable. However, the amount of expense incurred is not necessarily commensurate with the quality, efficiency or effectiveness of the service provided.

Formula: Governmental activities total debt * Governmental activities total assets

* Total long-term liabilities excluding operating liabilities such as accrued compensated absences, claims and judgments payable, and pension obligations. Short-term operating debt is also not included. Interpretation: The ratio is a measure of the degree to which the municipality’s total assets have been funded with debt. A lower ratio is considered favorable indicating that the government does not have significant creditor claims against its assets and has less risk of default on debt.

Total expense per capita ($ per citizen)

Formula: Government-wide total expense Population

Interpretation : The ratio is a measure of the expense necessary on average to provide services to a given citizen. A lower ratio is considered favorable indicating that a municipality is providing services to citizens at a comparatively lower cost. However, when comparing the results of this ratio between two different municipalities, one must consider whether the two municipalities provide comparable levels of police, fire, waste management, parks and recreation, and similar services. In addition, the amount of expense incurred is not necessarily commensurate with the quality, efficiency or effectiveness of the services provided.

Total debt per capita ($ per citizen)

Formula: Governmental activities total debt * Population

* Total long-term liabilities excluding operating liabilities such as accrued compensated absences, claims and judgments payable, and pension obligations. Interpretation: The ratio is a measure of the debt burden to citizens. A lower ratio is considered favorable indicating that the citizens are less heavily burdened. The municipality has the ability issue future debt at a lower cost.

Total general government (administration) expense per capita ($ per citizen)

Formula: Government-wide general government (administration) expense Population

Revenue Ratios Tax revenue per capita ($ per citizen)

Interpretation: See previous comments.

Formula: Governmental activities tax revenue Population

Total public safety expense per capita ($ per citizen)

Formula: Government-wide public safety expense Population

Interpretation: The ratio is a measure of the tax burden to citizens. A lower ratio is considered favorable indicating that current citizens are paying lower taxes. Therefore the municipality has greater ability to increase taxes to meet future needs.

Interpretation: See previous comments.

Total grants, contributions & other intergovernmental revenue as a percent of total revenue (%)

Total interest expense per capita ($ per citizen)

Formula: (Governmental activities total operating grants and contributions + total capital grants and contributions + other intergovernmental revenue) Governmental activities total revenue *

Formula: Government-wide interest expense Population

Interpretation: The ratio is a measure of the interest expense incurred per citizen. A lower ratio is considered favorable, indicating that a municipality has minimized its debt obligations, and reduced the strain that debt service payments can place on current municipal resources.

*Current revenue includes both program and general revenue but excludes gains, losses, contributions, special and extraordinary gains or losses and transfers. Interpretation: The ratio measures the municipality’s reliance on grants, contributions and other intergovernmental revenue. A lower ratio is considered favorable indicating that the municipality is less reliant on external sources that are beyond its control.

RubinBrown Public Sector Stats 2014 | 11

Financial Ratio Interpretations

GOVERNMENTAL FUND RATIOS Governmental funds are used to account for the basic activities of the municipality that are not supported by user charges or characterized by the municipality acting in a fiduciary capacity. Governmental funds account for operations, acquisition of capital assets related to basic operations, and the debt service requirements for related debt. Primary resources are taxes, intergovernmental revenues and for capital asset acquisition long-term debt proceeds. Governmental funds report using the current financial resource measurement flow and the modified accrual basis of accounting. Expenditures are often controlled by annual budgets.

Expenditure Ratios Total debt service expenditures as a percent of total revenue (%)

Capital outlay expenditures as a percent of total expenditures (%)

Formula: Governmental fund debt service expenditures Governmental fund total revenues

Formula: Governmental fund capital outlay expenditures Governmental fund total expenditures

Interpretation: This ratio measures the amount of current revenue that is devoted to meeting the year’s debt service requirements. Significant debt service requirements potentially lower the amount that can be used for providing current services. A low ratio is considered favorable.

Interpretation: The ratio measures whether the municipality is adequately providing for capital asset additions and improvements. A high ratio is considered favorable indicating that the municipality is providing adequately for its capital asset needs.

GENERAL FUND RATIOS The General Fund is the primary operating fund of a municipality. It accounts for the revenues that are not restricted for specific purposes and activities. Most of the basic operations of the municipality are accounted for in the General Fund. The General Fund, a governmental fund, reports using the current financial resource measurement focus and the modified accrual basis of accounting.

Financial Position Ratio Unrestricted fund balance as a percent of total revenue (%)

Revenue Ratios Intergovernmental revenue as a percent of total revenue (%)

Formula: General Fund unrestricted fund balance * General Fund revenues

Formula: General Fund intergovernmental revenue General Fund total revenue

Interpretation: The ratio measures the General Fund’s reliance on revenues from external sources to finance current operations. A low ratio is considered favorable indicating that the General Fund is not overly reliant on revenue sources that are beyond its control.

* Includes both assigned and unassigned fund balance. Interpretation: The ratio measures the ability of the General Fund to continue operations if its revenue is temporarily interrupted or declines. This is a measure of the General Fund operating cushion. Municipalities may set a target for this ratio. A higher ratio is usually considered favorable. However, an extremely high ratio may indicate that the municipality is not providing the level of services commensurate with its revenue stream.

Transfers in as a percent of total revenue and transfers in (%)

Formula: General Fund transfers in General Fund total revenues and transfers in

Interpretation: The ratio measures the reliance of the General Fund on transfers from other funds. To the extent the transfers are from enterprise funds, the users of enterprise services may be subsidizing General Fund operations. A low ratio is considered favorable indicating that the General Fund is not dependent on transfers.

12 | RubinBrown Public Sector Stats 2014

RubinBrown Public Sector Services Group

Consulting Services · Internal Auditing · Operational Reviews/Efficiency Analysis · Policy and Procedure Manuals · Strategic and Long-Range Planning · Capital Improvement Programs · Financial Analysis and Review · Benchmarking · Technology Analysis and Implementation

Through our extensive list of clients we serve as well as our involvement in associations and professional organizations at the local, regional and national levels, we understand the issues unique to the public sector. RubinBrown’s commitment to quality is demonstrated through our membership in the AICPA Governmental Audit Quality Center. This firm-based voluntary membership center is designed to help CPAs meet the challenges of performing quality audits in the unique and complex public sector industry. The Public Sector Services Group of RubinBrown provides services to a broad spectrum of government organizations, including municipal governments (cities and counties), institutions of higher education, local public school districts, state governments, and political districts such as; public libraries and municipal utility districts. Our public sector team includes experienced professionals all of whom are well trained in the financial reporting and audit requirements as promulgated in: · Government Accounting Standards Board · Government Audit Standards, issued by the Comptroller General of the United States, · Single Audit Act Amendments of 1996 and OMB Circular A-133, Audits of States, and Local Governments, and Nonprofit Organizations. Industry Involvement RubinBrown is committed to staying active within the industry, which helps us remain current on all new issues. We are active members of our regional and state Government Finance Officers Association (GFOA) chapters. Many team members are associate members of the national GFOA, including the Special Review Committee of the Certificate of Achievement for Excellence in Financial Reporting Program, the Association of Government Accountants, and special industry related committees of the American Institute of Certified Public Accountants. Public Sector Specialized Services Assurance and Accounting Services · Financial Statement Audits · Single Audits of Federal Financial Assistance Under OMB Circular A-133 · GFOA Certificate of Achievement for Excellence in Financial Reporting Program Expertise · Internal Audit Services · Agreed-Upon Procedures · Forensic Auditing

RubinBrown also is equipped to help public sector clients with technology consulting; fringe benefit consulting and retirement plan administration; bookkeeping services; and placement of temporary and permanent accounting, bookkeeping, and financial personnel.

Jeff Winter, CPA Partner-In-Charge 314.290.3408 jeff.winter@rubinbrown.com

Kaleb Lilly, CPA Partner & Vice Chair 913.491.4417 kaleb.lilly@rubinbrown.com

Cheryl Wallace, CPA Partner & Vice Chair 303.952.1288 cheryl.wallace@rubinbrown.com

RubinBrown Public Sector Stats 2014 | 13

RubinBrown LLP

@RubinBrown

Denver Office 1900 16th Street Suite 300 Denver, Colorado 80202

Kansas City Office 10975 Grandview Drive Building 27, Suite 600 Overland Park, Kansas 66210

St. Louis Office One North Brentwood Suite 1100 St. Louis, Missouri 63105

St. Louis Cortex Office 4240 Duncan Avenue CIC@4240, Suite 200 St. Louis, Missouri 63110

ph: 303.698.1883 fax: 303.777.4458

ph: 913.491.4144 fax: 913.491.6821

ph: 314.290.3300 fax: 314.290.3400

ph: 314.290.3300 fax: 314.290.3400

For more information, visit www.RubinBrown.com