RubinBrown Public Sector Municipal Stats 2019

GOVERNMENT-WIDE RATIOS 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.

Total expense per capita Formula: Government-wide total expense Population

Total general government (administration) expense per capita Formula: Government-wide general government (administration) expense Population Total public safety expense per capita Formula: Government-wide public safety expense Population Interpretation: See previous comments.

Total interest expense per capita 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.

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.

Interpretation: See previous comments.

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 % of total revenue Formula: Governmental fund debt service expenditures Governmental fund total revenues Capital outlay expenditures as a % of total expenditures 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.

Financial Ratio Interpretations

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