Spring 2008 issue of Horizons

knowledge. commitment. value. CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

The following shows a breakdown of participating municipalities by location:

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Debt per capita averaged $1,093, which represents the debt burden on each citizen.

Tax revenues per capita averaged $705, while expenses per capita averaged $842, showing the need for other types of revenue, like charges for services and grants. Total grants and other non-tax revenues represented an average of 12 percent of total revenues, so cities are somewhat reliant on revenues from external sources. Public safety expenses are always the largest functional expense and, on average, comprised 35 percent of total expenditures. Debt service expenditures at the fund level use an average of up to 14 percent of total revenues that potentially could be used for services. Also on a fund basis, capital expenditures as a percent of total expenditures averaged 16 percent, which represents the government’s commitment to adequately provide for its capital asset needs. On a fundbasis, the unreserved fundbalance amounted to, on average, a healthy 46 percent of revenues, which shows that most cities can weather a temporary shortfall in revenues. For the Kansas City governments participating in the survey, we noted very similar averages to St Louis, as follows: A 7 percent increase in their government-wide net assets, also representing a very healthy improvement in the financial condition of those cities. 78 percent of the respondents experienced an increase in net assets and experienced positive interperiod equity in 2006 and, on average, revenues exceeded expenses at a clip of 1.2 times. A younger aged infrastructure exists because accumulated depreciation on assets averaged approximately 34 percent of the cost, and cities in the region currently are addressing their replacement cost. • • • • • • • • •

Metro Metro St. Louis Kansas City Total

30

13

43

Municipalities Participating

Format of the Report The ratio results were presented separately for the St. Louis and Kansas City metropolitan areas. Information for the St. Louis metropolitan area was further segmented by population greater than or less than 20,000. The Kansas City information was not segmented; however, the average population of the metro Kansas City municipalities was 57,600. For each ratio presented, the report gave information both by quartile and average. The computed values for each ratio were sorted from most favorable to least favorable, and quartiles were determined. A description and interpretation of the ratios also were provided. Analysis In the St. Louis area, we noted that, on average, municipalities experienced the following: A 13 percent increase in their government-wide net assets, representing a very healthy improvement in the financial condition of those cities. 90 percent of the respondents experienced an increase in net assets and experienced positive interperiod equity and, on average, revenues exceeded expenses at a clip of 1.2 times. An aging infrastructure exists because, on average, accumulated depreciation on assets approximated 42 percent of the cost, and cities in the region may be experiencing significant replacement cost in the future. • • •

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Debt to assets, which shows how leveraged the cities’ capital assets are, averaged .41 times.

34 u spring 2008 issue