RubinBrown Public Sector Stats 2011

Unreserved General Fund Balance as a % of Revenues

Fund balance of the general fund is generally a focal point of a city’s financial health, at least from a short term perspective. Surprisingly, unreserved fund balance as a percent of total revenues in the general fund has remained relatively stable since 2008. This indicates a level of disciplined financial management practices put into place to offset the effects of declining revenues. 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 region. St. Louis The 2010 results for the St. Louis area illuminate

60%

52.3%

51.7%

50.5%

44.1%

50%

35.4%

34.8%

33.1%

30% 40%

39.5%

20%

22.6%

10%

0%

2007

2008

2009

2010

St. Louis Kansas City Denver

the consequences of the nation’s economic malaise. The average increase in net assets for St. Louis municipalities was a mere 1.4% in 2010, as compared with 6.9% in 2009 and 8.0% in 2008. Furthermore, ten of the 34 St. Louis municipalities (or 29%) reported a decrease in government- wide net assets in 2010, as compared with 11% in 2009. Finally, ten of the 34 St. Louis municipalities (or 29%) reported negative unrestricted net assets in 2010. This was the same for 2009. The cause of these adverse fluctuations in net assets is evident when revenue per capita and expenses per capita is examined. As indicated in the following chart, revenue per capita for St. Louis municipalities decreased from $751 in 2008, to $722 in 2009, to $701 in 2010. This is caused primarily by declining sales tax revenue due to decreased economic activity, declining property tax revenue due to a decrease in the assessed valuation of the property base, and declining grant revenue due to efforts by state and federal governments to reign in their spending.

Meanwhile, per capita expenses for St. Louis municipalities have not experienced a similar decrease, as the following chart indicates. In fact, per capita expenses increased from $895 in 2009 to $964 in 2010. Expenses for municipalities have failed to decrease in part because the primary expense for most municipalities is employee salaries. Even if the municipality foregoes salary increases for employees, health care costs and retirement benefits continue to rise.

Tax Revenues Per Capita

$760

$751

$728

$722

$696

$701

$697

$664

$632

$600

2007

2008

2009

2010

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