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Local Government Management Guide

Financial Condition Analysis

Alan G. Hevesi COMPTROLLER

State of New York Office of the State Comptroller Division of Local Government Services & Economic Development April 2003

STATE OF NEW YORK OFFICE OF THE STATE COMPTROLLER

As a local official, you need the tools to do your job. The Office of the State Comptroller also recognizes that you need to be kept up-to-date on financial practices and developments. We have developed a new publication entitled the Local Government Management Guide, which replaces the Financial Management Guide for Local Governments. Sections of the new publication will be released periodically. The new guide includes technical information as well as suggested practices for local government operations. Financial Condition Analysis, the first section of this new guide, is now available. We believe that you will find this release and subsequent sections an easy-to-use tool and resource. The Local Government Management Guide is available in electronic format, including CD, so that it can be easily updated. The publication is also available on our web site, www.osc.state.ny.us.

http://osc.state.ny.us

http://www.osc.state.ny.us

Table of Contents

Introduction...............................................................................................................1Overview....................................................................................................................1

Part I - Defining Financial Condition........................................................................1

Part II - Using Analytical Tools to Evaluate Financial Condition............................2

Indicators and Ratios.....................................................................................3Trend Analysis...............................................................................................3Peer Comparisons..........................................................................................4Judgment and Reasoning...............................................................................4Resources......................................................................................................4

Part III - Identifying Causes of Fiscal Stress............................................................5

Cash Solvency.................................................................................................5Budgetary Solvency.........................................................................................6Long Run Solvency..........................................................................................7Service Level Solvency....................................................................................7

Part IV - Improving Financial Condition Through Corrective Action.....................8

Stronger Cash..................................................................................................8Better Budgeting..............................................................................................9Continued Health.............................................................................................9Quality Service...............................................................................................10Final Thoughts............................................................................................11

Part V - Appendices.................................................................................................12

Appendix A - Glossary of Terms.................................................................13Appendix B - OSC Financial Indicators.......................................................17Appendix C - Data Request Form...............................................................51Appendix D - Financial Indicator Codes......................................................52

OSC Contacts

http://www.osc.state.ny.us/localgov/muni/directo2.htm

Financial Condition Analysis 1

Financial Condition Analysis

Introduction

Sound fiscal health is imperative to the effective operation of municipalities in New YorkState. For this reason, local managers should periodically assess the financial conditionof their local government. Timely financial condition analysis can provide managerswith valuable information on the past, present and future state of their municipality�sfinances. This information can highlight current or potential fiscal problems and providethe impetus for timely corrective action. By taking action to address weaknesses andstrengthen fiscal health, local managers can better ensure that resources are availableto fund the level and quality of services expected by local citizens.

Overview

The following sections are designed to help local managers analyze the financialcondition of their local government:

• Defining Financial Condition• Using Analytical Tools to Evaluate Financial Condition• Identifying Causes of Fiscal Stress• Improving Financial Condition Through Corrective Action

For additional assistance, the following appendices are also provided:

Appendix A - Glossary of Terms used in this chapterAppendix B - Office of the State Comptroller (OSC) Financial Indicators 1 through 14Appendix C - OSC Data Request Form for Indicators, Peer Comparisons and Financial DataAppendix D - Financial Indicator Codes

I. Defining Financial Condition

Financial condition may be defined as a local government�s ability to finance serviceson a continuing basis. This ability involves maintaining adequate service levels whilesurviving economic disruptions, being able to identify and adjust to long-term changesand anticipating future problems.

2 Chapter 11 - Local Government Management Guide

Put another way, financial condition refers to a local government�s ability to:

• generate enough cash to pay its bills over a 30 to 60 day period (cashsolvency),

• generate sufficient revenues throughout its fiscal year to meet expenditures andnot incur a deficit (budgetary solvency),

• pay all the costs of doing business in the long run (long run solvency) and

• provide needed and desired services at the level and quality needed for thehealth, safety and welfare of the community (service level solvency).1

It is important to note that these solvency areas are interrelated and that localgovernment services may be at risk if a municipality is unable to maintain solvency inone or more of the defined areas. The efficiency of government operations can beaffected when any of these solvency areas becomes an issue. Costs may rise orrevenues may decline because of solvency problems. For example, a local governmentthat is experiencing cash solvency problems may have to borrow to pay vendors andemployees. The interest paid on the borrowed money becomes an additional cost forthe municipality. In a snowball effect, as operations become less efficient (in thisexample, more costly), the municipality�s fiscal health is further compromised. Thisweakened financial condition can cause the effectiveness of municipal operations to beseriously undermined. With fewer financial resources to fund them, the quality andextent of essential services may be diminished (service level solvency).

Because these solvency areas are interrelated, periodic financial condition analysisshould address each area. (Such analysis of a local government�s solvency areas canhelp identify the early signs of downward fiscal trends that threaten the delivery ofmunicipal services. The early identification of negative trends, and their causes, canallow for corrective action by management before the situation worsens.)

II. Using Analytical Tools to Evaluate Financial Condition

Analyzing the financial condition of a municipality can provide valuable informationabout its past, current and future fiscal health. Reviewing the information contained inprior and current year financial statements allows for the assessment of a localgovernment�s fiscal strengths, weaknesses and tendencies. Managers can use thisinformation to develop appropriate financial plans that will help ensure the continueddelivery of quality municipal services.

1Groves, S. M. and M. G. Valente. Evaluating Financial Condition: A Handbook for Local Government. ICMA, 1994


Indicators and Ratios

An analysis of current year information using various ratios (indicators) can provide anup-to-date picture of a municipality�s financial position and results of operations. Theseindicators can provide managers with information on current financial activities so thatsolvency issues can be identified and investigated. They can provide a basis for trendanalysis and intergovernmental comparisons. Financial indicators can providesnapshots of per capita ratios, revenue collection efforts, expenditure levels andcompositions, results of operations, fund balances, cash levels and other key areas.These indicators can be used to analyze the activity of each major operating fund or toanalyze government-wide issues, such as debt or cash balances.

Once the ratios are obtained, they can be compared to internal or external benchmarks.Internal benchmarks for a local government may be set by policy. For example,management may set an internal threshold for taxes receivable as a certain percentageof real property tax revenues. (If the percentage is exceeded, then management wouldbe notified). External benchmarks are standards set by convention or practice.�Industry� norms for cash as a percentage of current liabilities or for debt per capita areexamples of external benchmarks. Such benchmarks may be found in managementtextbooks, rating agency guidelines or government organization literature. (The StateComptroller�s Office has suggested benchmarks for some of the financial indicatorsdiscussed in Appendix B). Any indicators that vary significantly from establishedbenchmarks should be investigated. Positive variances may indicate an improvedpractice that can be used to improve other areas of operation. A negative variance mayindicate an area for further analysis and eventual corrective action.

Trend Analysis

A trend analysis of several years of data is an equally important analytical tool foridentifying underlying causes of fiscal problems (or successes) and for predicting futurefinancial outcomes. A review of an indicator over a period of years can help put thecurrent year�s activity into context. The review can indicate whether the most recentyear is the continuation of an upward trend, a downward trend or something in between.A multi-year analysis can quickly identify those years that were unusual or outside thetrend, pinpointing those areas that require further investigation.

More importantly, a trend analysis can help identify a negative financial trend.(Examples of negative trends are included with the guidance for each indicator inAppendix B). The identification of negative trends provides two benefits to municipalmanagers. First, if warranted, corrective action can be taken to address the underlyingcauses of the problem before it worsens. Second, budget estimates (current andfuture) can be modified to better reflect existing conditions. If corrective action ispossible and it is implemented soon enough, the budget can be adjusted to reflect theimproved projections. If corrective action is not possible or immediate, projections canbe downgraded to prevent significant fiscal problems from occurring later on.


Peer Comparisons

Another analytical tool that can provide important information to fiscal managers andothers is a peer comparison. (While any financial ratio could be used for peercomparisons, per capita ratios are particularly useful for this type of analysis.)Comparing the financial numbers of a base municipality to those of other similargovernments allows differences to be identified and analyzed. Developing peer groupaverages or ranges can further increase the value of these comparisons. The basemunicipality can then determine where it stands in relation to the group norm.

Peer comparisons can highlight operational areas where the base municipality�snumbers look better than the peer group�s averages. This may indicate that themunicipality is doing something well. A peer group comparison may also show that themunicipality�s numbers are below average. This might suggest areas for furtherinvestigation and possible improvement. Contacting one of the peer municipalities thathave �better� numbers may yield some ideas for improving current practices.

Judgment and Reasoning

An important point to keep in mind when performing any analytical procedure is thatfinancial ratios/indicators are only as good as the data from which they are derived. Anyunusual results (red flags) should be traced to the supporting data for validation beforeproceeding to more complex and time consuming operational explanations. Ideally, thesupporting financial data should be reviewed for consistency and reasonablenessbefore it is used for analytical purposes. This initial review should answer severalquestions. Do the numbers make sense? Are they realistic? Are they reliable, currentand complete? Having good numbers up front will make all other analytical techniquesthat much more effective. Also, reviewing the quality of the supporting data may helpidentify reporting deficiencies or other information concerns that require attention.

Resources

There are a number of resources available to help with the analysis of financialcondition for local governments. Software programs can be purchased or developed toproduce the exact financial ratios that are needed for particular analytical objectives.Local colleges or high schools may be able to provide assistance. Other localgovernments may already be using their own spreadsheets or databases and may bewilling to share their technology/expertise. Government organizations may also be ableto help.

The New York State Comptroller�s Office can help. Financial condition indicators, peercomparisons, and balance sheet/operating statement details are available upon requestfrom the State Comptroller�s Office. Up to six years of financial data is available. SeeAppendix C for an order form to request any of this financial information. A guidedescribing the OSC financial indicators is included in Appendix B.


III. Identifying Causes of Fiscal Stress

Fiscal stress comes in various forms and levels. As discussed in the opening section, amunicipality can experience solvency problems in one or more of four financial areas.Cash solvency, budgetary solvency, long run solvency and service level solvency are allareas where a local government may be struggling. Each solvency area has uniquecontributing factors that can cause fiscal stress to occur. For example, certain actionsor inactions may directly contribute to a municipality not having sufficient cash to pay itsbills on time (cash solvency).

There are also factors that can contribute to fiscal problems in many or all of thesesolvency areas. Severe budgetary problems may cause cash flow problems as well aslong run and service level concerns. The degree of fiscal stress will also vary fromsituation to situation. Cash flow problems may be no more than a temporaryannoyance. However, chronic cash problems may result in significant additional costsboth from increased vendor prices and increased debt. Similarly, fund deficits mayrepresent a one-time shortfall or years of operating losses.

The causes of fiscal stress are many and varied. Often more than one factor can beidentified. There may be primary and secondary factors. It is important to thoroughlyinvestigate each instance of fiscal stress so that most of the underlying causes areidentified and addressed. Each situation will have its own unique aspects. The clearerthe understanding of the causes, the better the chance for effective corrections.

It is not possible to list and discuss all the contributing factors of fiscal stress in localgovernments, but to help start the identification process, here�s a general discussion ofareas to consider. (Possible corrective actions will be addressed in the next section ofthis chapter).

Cash Solvency

Cash flow problems are generally the result of one or more of these conditions:

• Billings are not frequent enough or occur at the wrong time of the year in relationto expenditure demands.

• Cash collections are not occurring fast enough.

• Unpaid (receivable) amounts are increasing.


Budgetary Solvency

Budgetary problems can have a number of underlying causes:

• There may be problems with budget estimates.• Conditions may change during the year affecting actual revenue or expenditure

levels.• Controls over revenues, expenditures and/or information systems may be weak

or missing.• Expenditures may be increasing at a faster rate than revenues.• Non-recurring revenues may be used to finance recurring expenditures.• Significant decisions may be made that are not cost-effective.• External factors such as state and federal mandates, severe weather, declining

population or industry, or a weakening economy may have a negative impact onmunicipal finances.

(For external factors, it is important to note that the real issue is how thesefactors affect a local government�s revenues and expenditures).

The following scenario illustrates some possible causes:

A review of financial indicators (see Appendix B) may disclose that a municipalityis experiencing a downward trend in its general fund operations. This trend maybe reflected in an analysis of results of operations (OSC Indicator 4) that showsoperating deficits for the last 5 years. The trend may also be seen in a review offund balance (OSC Indicator 5) that shows fund balance declining steadily overthe same period. Although the fund balance for the last completed fiscal year isstill positive, it is obvious that if the trend continues, the general fund willexperience a fund deficit by the end of the next year. This is a fiscal �red flag.�Something needs to be done (sooner rather than later) to avoid fiscal problemsdown the road.

Identifying the causes of this negative trend will involve further analysis andinvestigation. A good approach is to start with the general and work to thespecific. Rarely is this a linear process (but it should be logical). There are oftenmany side paths to be taken and investigated. Here is one possibility to illustratethis point:

A review of revenue and expenditure detail records (budget vs. actual) showsthat there have been significant unfavorable budget variances for several lineitems in each of the last 5 years. Two revenue items have been consistentlyoverestimated and one expenditure area has been repeatedly underestimated(or so it appears). Assuming the numbers are correct (your first investigation),logic would indicate that there is a problem with either the estimates, the actualresults or both.


This is where further investigation is needed. Questions should be asked todetermine which of these factors is contributing to the fiscal problems. Theanswers to those questions will dictate the next set of questions and/or possiblecorrective actions. For example, it may turn out that revenue estimates werebased on certain assumptions that have not come to pass for the last 5 years.(Time to revisit these assumptions for the next budget.) It may be that theestimates are supportable but that revenue collections have been down for someto-be-determined reason(s). Perhaps unpaid receivables have grown over thelast 5 years. (Time to find out why and take corrective action.)

On the expenditure side of the problem, it may be that costs have risendramatically, demand for services has increased over time or adequate costcontrols are not in place. It may be all of these reasons. It may be somethingelse. Each answer will generate another question until the fundamental causesare identified.

Long Run Solvency

Long run solvency problems have many of the same contributing factors as budgetary(short-term) solvency. In many ways, ongoing budgetary solvency issues can lead tolong run solvency problems. Conditions keep getting worse. (This is another goodreason for timely corrective action when budget problems first surface.) Some othercauses that should be considered for this solvency area are:

• Deteriorating infrastructure and/or fixed assets• Inadequate funding provisions for long-term liabilities• Failure to properly account for long-term liabilities• Lack of planning/budgeting for multi-year obligations such as employee

contracts, new services, and long-term service contracts

Service Level Solvency

Service level solvency issues can often represent the last stage of fiscal decline.Chronic budgetary problems can result in cuts to essential quality of life services. Soagain, uncorrected budgetary solvency problems can have severe financialconsequences down the road. Other factors contributing to service level declineinclude:

• A stagnant or shrinking tax base• A lack of revenue growth• Deteriorating infrastructure• Budget inflexibility• An inadequate (cost) accounting system


All of these conditions can have a significant impact on a municipality�s ability to providekey services to its constituents.

IV. Improving Financial Condition Through Corrective Action

Generally, the less advanced the fiscal stress, the easier the fix. That�s why earlydetection and correction are so important. Periodic financial condition analysis can bean effective tool for early detection of negative fiscal trends. Once the causes of thesenegative trends have been sufficiently isolated, corrective action becomes the next step.Again, there are many possibilities for addressing the underlying reasons for any fiscalproblems encountered. Each factor should be addressed. Additional information isavailable on a number of these actions in other chapters of the Local GovernmentManagement Guide. Finally, the costs and benefits of each option should be weighedas part of the decision process.

Stronger Cash

Possible actions to remedy cash flow problems include increasing tax or user chargerates, changing billing cycles (timing and/or frequency), improving collection efforts,shifting payment schedules, improving interest earnings and borrowing cash. Some ofthese options are self-explanatory:

• Collection efforts can be improved through stricter enforcement and increasedpenalties, within legal parameters.

• Payment schedules can be shifted a number of ways depending on the type ofexpenditures being made. In certain circumstances, contractual schedules (debtand vendor) may be re-negotiated. It may be possible, subject to collectivebargaining agreements, to make payrolls bi-weekly, semi-monthly or monthly.

• Interest earnings could be increased by shopping for higher rates and byinvesting the maximum amount possible of idle cash.

• Borrowing cash is another option for improving cash flow. When considering thisoption, keep in mind that advancing monies to one fund from another may resultin lower borrowing costs than issuing short-term notes. (General Municipal Law §9-a addresses the issue of such interfund advances).


Better Budgeting

Improving budgetary solvency can involve even more options. Most of these optionswill fall into one of the following general categories: improving budget accuracy,improving structural balance, monitoring results throughout the year, controlling costs,improving internal controls and using cost-benefit analysis:

• Beginning the fiscal year with sound, conservative estimates of revenues,available fund balance and expenditures can prevent serious deficit-causingproblems.

• A structurally balanced budget limits the use of one-shot, non-recurring revenuesexcept to fund non-recurring or capital expenditures.

• Timely identification of significant revenue or expenditure fluctuations will allowfiscal managers to modify the adopted spending plan and avoid problems.Periodic status reports should be used to closely monitor budget activity so thatcorrective action can be taken sooner rather than later.

• Costs can be controlled through a variety of measures intended to achieve thebest price for goods and services, improve the efficiency of processes or sharecosts with other municipalities.

• Internal controls can be strengthened through improved record keeping andaccountability. For example, expenditures may be controlled through a purchaseorder and encumbrance system that assures that approved funds are availableprior to purchase.

• Each significant decision should include cost-benefit analysis. The budgetimpact (current year and beyond) of a particular option should be identified priorto implementation.

Continued Health

Ensuring long run solvency requires foresight. Multi-year financial plans and long-termcapital plans are essential for long-term fiscal health. By planning for service andcapital needs beyond the current year, managers can better anticipate and prepare forthe necessary funding. Such planning reduces the likelihood of severe service cuts orcostly �emergency� expenditures. Two important pieces of long-term planning areaccurately identifying future financial obligations and providing for sufficient funding toliquidate those obligations when they become due:

• Funding may be provided through a variety of methods, including yearlybudgetary appropriations, available fund balance, legal reserve monies and/ordebt proceeds.


• Key to ensuring that sufficient funds are available when needed is accurateaccounting for these long-term obligations. Getting reliable numbers on thebooks gives financial planners a clear target to shoot for. Again, a goodmulti-year plan can help prevent unpleasant fiscal surprises down the road.

Quality Service

Service level solvency problems are usually the result of prolonged fiscal stress.Because the problems are so severe at this point, lasting solutions can requiresignificant actions by local managers. These corrective actions can often take years tofully implement. At this level of fiscal stress there are no quick and easy solutions.Turning off streetlights, closing firehouses, laying-off workers and similar cost-cuttingmeasures are not solutions to, but symptoms of, service level problems. All of thesedrastic measures reduce the quality of life in affected municipalities. Needed anddesired services are no longer being provided (see solvency definition on page 2).Long-term strategies needed to help restore service quality include expanding the taxbase, developing new revenue sources, investing in infrastructure, improving budgetflexibility, planning strategically and accounting for service costs:

• The tax base can be expanded through various economic development initiativesthat encourage development and business.

• Sharing the provision of municipal services with other governments in effecttransfers a portion of the cost of those services to other tax bases. Similarly,charging other governments for services provided to them can be a way todevelop new revenue sources.

• Other, non-local revenues should also be sought. Increases to tax rates anduser fees should be avoided or pursued as a last resort. Such increases mayhave a negative impact on the tax base as businesses and citizens move to lessexpensive areas. Work with other governments to obtain additional state aid,federal aid and sales tax monies. Consider requesting that the county take overthe enforcement of delinquent taxes, if appropriate. Look for ways to increasethe number of customers using fee-generating services such as recreation,water, sewer, refuse, parking, etc. (Contact our office for assistance. We canperform a $MART review to help you develop non-tax revenues.)

• As a long-term strategy, investment in infrastructure can help resolve manyfinancial woes. Most importantly, for service level solvency problems, soundinfrastructure can be a key element for attracting new business to a municipality.It also allows the municipality to provide a higher quality of service to itstaxpayers. To help finance such projects consider partnering with other localgovernments, seeking additional state and federal funding, and/or seeking otherauthorized financing arrangements.


• As another long-term solution, improving budget flexibility can help municipalitiesdeal with an array of fiscal problems. Once finances have stabilized, beginadopting budgets that generate additional funding sources such as reserves,contingency appropriations and fund balances. This strategy will allow localmanagers to more easily adjust to financial changes without resorting to drasticservice cuts. On the expenditure side of the budget, by making decisions thatlimit the extent of fixed, long-term financial commitments (for such things as debtredemption and personal service contracts), managers can open their budgets tomore cost-cutting options should the need arise.

• Planning strategically by developing a clear municipal vision and settinglong-term goals can help local officials with key financial decisions. Decisionscan be made in the context of a strategic plan. Difficult funding and service levelchoices can be made with the long-term goals in sight. Performance measurescan also be established and tracked to help improve the efficiency andeffectiveness of municipal operations.

• Another necessary tool for improved service level solvency is a cost accountingsystem. For service level solvency problems, controlling costs is often anecessary remedy. An accounting system that tracks service costs will helpmanagers control those costs and also provide them with the information neededto make effective decisions. For instance, such a system would allow managersto analyze the actual cost of services and determine if related revenues weresufficient to cover both fixed and variable costs. (A survey of surroundingmunicipalities would determine if fees could be raised to comparable levels).

Final Thoughts

While all of the above strategies are presented as corrective actions for varioussolvency problems, the best strategy is to implement these measures before theybecome necessary. These recommendations can be viewed as sound businesspractices and should be used to prevent fiscal problems from occurring or worsening.Timely financial condition analysis will let you know if your preventive measures areworking.

The routine analysis of financial condition should be analogous to visiting your doctor. Itshould be done at least annually. Prevention is the best medicine, but early detectionand treatment are also key components of good (fiscal) health. Financial conditionanalysis can produce the same result for a local government. This analysis goesbeyond a periodic review of budget status reports and annual reports. It provides abigger, long-term picture of a local government�s financial position. Choose thoseindicators that have the most meaning to your government�s operations. Indicatorsshould provide managers with valuable information regarding the past, present andfuture of their municipality. Remember, early detection is the key.


Financial Condition Analysis - Appendices

Appendix A - Glossary of Terms 13

Appendix B - OSC Financial Indicators 17

Appendix C - Data Request Form 51

Appendix D - Financial Indicator Codes 52


APPENDIX A

GLOSSARY OF TERMS

This glossary is intended for use with this chapter, primarily OSC Financial Indicators 1through 14 (see Appendix B). The definitions included here provide further explanationof the materials contained in Appendix B. They should be used in that context only.

Budgetary Solvency - A local government�s ability to generate sufficient recurringrevenues during the fiscal year to meet recurring expenditures without incurring a funddeficit.

Capital Outlay - Expenditures to either construct or extend the life of infrastructure,buildings, machinery or equipment having a large initial cost and a useful life of morethan one year. Minor equipment purchases are also included in this category.

Cash and Investments - All cash and investments accounts that have not been legallyreserved and are available to pay current liabilities as they become due.

Cash Solvency - A local government�s ability to generate enough cash to pay bills overa 30 or 60-day period.

Current Liabilities - Obligations that will be liquidated with expendable availablefinancial resources. Examples include short-term debt issues, accounts payable,accrued liabilities, due to other governments, etc.

Debt Limit - The maximum amount of indebtedness that may be contracted by a localgovernment under law.

Debt Service Expenditure - The amount that a local government must pay each yearfor principal and interest on debt. Expenditures are made from the major governmentaloperating funds and the debt service fund.

Enterprise Fund - A fund established where the intent of the governing body is that thecosts of providing goods or services to the general public on a continuing basis arefinanced or recovered primarily through user charges (i.e., water, sewer, electric utility,airport, hospital, etc.).

Expenditures - For purposes of financial condition analysis, any use of funds toprovide services or support those services.

Financial Condition - A local government�s ability to finance expected services on acontinuing basis. This means maintaining adequate service levels while survivingeconomic disruptions, having the ability to identify and adjust to long-term changes andanticipating future problems.


Fiscal Stress - The inability of a local government to maintain solvency in any one ormore of the following areas: cash solvency, budgetary solvency, long-term solvency orservice level solvency. (The State Comptroller�s Office has developed indicators tomeasure trends in a government�s operations that may provide warnings when a localgovernment is experiencing difficulty in any of these solvency areas).

Full Value Assessment - Assessed value divided by the equalization rate.

Fund Balance - For purposes of financial condition analysis, the total accumulation ofall operating surpluses and deficits since the beginning of a local government�sexistence. Assets-Liabilities = Fund Balance.

Fund Balance Appropriated - The part of the unreserved fund balance that has beenappropriated for use in the next fiscal year�s budget.

Fund Balance Reserved - The part of fund balance that is not available fordiscretionary appropriation due to accounting treatment or the creation of legallyauthorized reserves.

Fund Balance Unreserved - The total fund balance at the end of the fiscal year lessany reservations of fund balance.

Gross Expenditures - The total of all expenditures for a specific fund for the year.

Gross Revenues - The total of all revenues for a specific fund for the year.

Intergovernmental Revenues - Those revenues received from New York State and/orthe federal government.

Long-Term Debt - Debt with a maturity date more than one year after the date ofissuance.

Long-Run Solvency - A local government�s ability to pay all the costs of doing businessin the long run. (This includes maintaining the infrastructure, meeting employee benefitobligations, paying debt as it comes due, etc.).

Major Governmental Operating Fund - Any fund with total expenditures greater than10% of the aggregate expenditures for all governmental operating funds.

One-Time Revenues - Revenues that are not derived from a government�s normaloperating cycle and, therefore, may not be available from year to year. Also known as�one-shot� revenues. As used in the OSC Financial Indicators, one-time revenuesinclude such items as proceeds from the sale of real or personal property, specialnon-recurring grants and proceeds from the issuance of long-term obligations.


Operating Deficit - Total expenditures for the year exceed total revenues for anoperating fund.

Operating Surplus - Total revenues for the year exceed total expenditures for anoperating fund.

Per-Capita Debt - The amount of a government�s debt divided by its population. Percapita debt is used to indicate the government�s debt position by showing theproportionate debt borne per resident.

Real Property Tax Receivables - Real property taxes that remain unpaid (at year-end).

Real Property Tax Revenues - Real property taxes levied for the budget of the currentyear.

Recurring Expenditures - Expenditures made through the normal year-to-yearoperations of a local government.

Recurring Revenues - Revenues derived through the normal year-to-year operationsof a local government. These do not include one-time revenues.

Revenues - For purposes of financial condition analysis, any funding source generatedthrough operations to finance local government services.

Service Level Solvency - A local government�s ability to provide needed and desiredservices at the level and quality required for the basic health, safety and welfare of thecommunity.

Structurally Balanced Budget - A budget that is structured to finance recurringexpenditures with recurring revenues.

Tax Limit - The maximum amount that may be raised by real property tax in any fiscalyear under law.

Total Fixed Costs - As used in the OSC Financial Indicators, salaries and fringebenefits plus debt service.


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APPENDIX B

OSC FINANCIAL INDICATORS

The State Comptroller�s Office has developed a number of fiscal indicators that can beused to gauge the financial condition of local governments. These indicators areexpressed as ratios to facilitate comparisons with other similar local governments and togive a picture of what has been occurring in a particular municipality over a period of 5to 6 years. Graphs are included to help illustrate local government financial trends. Asample of each indicator is also provided. These indicators can be obtained for amunicipality upon request. A data request form is available (Appendix C) or call theState Comptroller�s Office at (518) 473-5065 to order selected indicators and otherfinancial data.

It is important to analyze the numbers that make up the indicators to obtain a betterunderstanding of what is actually occurring and whether there is a need for concern.(To assist with this analysis, a list of indicator components is provided in Appendix Ddetailing the account codes used for each formula). No one indicator alone should beaccepted as an indication of a positive or negative trend. Although the indicators arenot weighted, there are some indicators that tend to provide a stronger measure offiscal condition than other indicators. Indicators 4, 5 and 6b are considered keyindicators for financial condition analysis. The following indicators are explained in thissection:

Indicator 1: Revenues and Expenditures Per Capita, Recurring Revenues Per CapitaIndicator 2: Real Property Taxes ReceivableIndicator 3: Fixed Costs - Personal Services and Debt ServiceIndicator 4: Operating Surplus/DeficitIndicator 5: Unreserved Fund Balance and Appropriated Fund BalanceIndicator 6a: Liquidity - Cash and Investments as a Percentage of Current LiabilitiesIndicator 6b: Liquidity - Cash and Investments as a Percentage of Gross Monthly ExpendituresIndicator 7: Long-Term Debt Per CapitaIndicator 8: Capital OutlayIndicator 9: Current LiabilitiesIndicator 10: Intergovernmental RevenuesIndicator 11: Economic Assistance CostsIndicator 12: Public Safety CostsIndicator 13: Tax Limit ExhaustedIndicator 14: Debt Limit Exhausted

A detailed explanation of each indicator includes:

� Purpose� Measurement� Formula� Negative Trends� Recommended Funds to Review� Analysis� Possible Practices


Indicator 1: Revenues and Expenditures Per CapitaRecurring Revenues Per Capita

Purpose: To identify trends in a local government�s revenues and expenditures relativeto the population of the local government.

Measurement: Gross and recurring revenues generated per person and theexpenditure burden per person within a municipality.

Formula: a. Gross RevenuesPopulation

b. Gross ExpendituresPopulation

c. Recurring Revenues (Gross Revenues - One-Time Revenues)Population

Negative Trend: Indicator 1b increasing faster than indicator 1a or 1c.

Recommended Funds to Review: All major governmental operating and enterprisefunds, combined as necessary.

Analysis: Examining per capita revenues and expenditures shows changes inrevenues and expenditures relative to changes in population size. As populationincreases, the need for services is likely to increase. The cost of those services and therevenues needed to finance them would also likely increase. If the trend in revenuesper capita is downward (less revenue per capita) coupled with a trend in expendituresthat is upward (more expenditures per capita), it may indicate that the local governmentis unable to maintain services at current levels. The local government would then haveto determine if it is able to develop new revenue sources and/or find ways to reduceexpenditures. Formula 1c (recurring revenues per capita) provides a more conservativeview of revenue levels by subtracting out revenues that may not be available year-to-year. Significant decreases in this ratio (without corresponding decreases in 1a) couldindicate over-reliance on sporadic revenues. In evaluating the trends of this indicator, itis important to consider that the population figures used to calculate the ratios are onlyupdated every ten years, with the federal census. Furthermore, apparent increases inrevenues or expenditures per capita may be the result of increases in the cost of livingand may not reflect actual increases in per capita revenues or expenditures in realdollar terms.

Possible Practices: Local governments should meet recurring expenditures withrecurring revenues to ensure structurally balanced budgets. Reliance on non-recurringrevenues or appropriations of fund balance could result in budgetary gaps that have tobe corrected in future-year budgets.

NYS Comptroller

NYS Comptroller

NYS Comptroller

Fund

Agg

rega

ted:

A Form

ula:

Gro

ss R

even

ues

P

opul

atio

n

Gro

ss E

xpen

ditu

res

Popu

latio

n

Rec

urrin

g R

even

ues

Popu

latio

n

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

2

001

G

ross

Rev

enue

s $2

70,0

36,4

04

$286

,543

,141

$2

95,6

27,1

30

$321

,049

,552

$3

40,3

13,1

86

$340

,788

,806

Popu

latio

n 29

2,79

3 29

2,79

3 29

2,79

3 29

2,79

3 29

4,56

5 29

4,56

5

Per C

apita

Gro

ss R

even

ues

$922

$9

79

$1,0

10

$1,0

97

$1,1

55

$1,1

57

Gro

ss E

xpen

ditu

res

$265

,495

,407

$2

77,3

91,9

57

$289

,703

,390

$3

06,5

71,0

11

$327

,000

,234

$3

48,8

11,0

58

Po

pula

tion

292,

793

292,

793

292,

793

292,

793

294,

565

294,

565

Pe

r Cap

ita G

ross

Exp

endi

ture

s $9

07

$947

$9

89

$1,0

47

$1,1

10

$1,1

84

O

ne T

ime

Ope

ratin

g Re

venu

es

$0

$0

$1,9

00,1

13

$0

$0

$0

G

ross

Rev

enue

s �

One

Tim

e O

per.

Rev.

$2

70,0

36,4

04

$286

,543

,141

$2

93,7

27,0

17

$321

,049

,552

$3

40,3

13,1

86

$340

,788

,806

Popu

latio

n 29

2,79

3 29

2,79

3 29

2,79

3 29

2,79

3 29

4,56

5 29

4,56

5

Per C

apita

Rec

urrin

g Re

venu

es

$922

$9

79

$1,0

03

$1,0

97

$1,1

55

$1,1

57

922

907

922

979

947

979

1010

989

1003

1097

1047

1097

1155

1110

1155

1157

1184

1157

0

500

1000

1500

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 1 -

Rev

enue

s, E

xpen

ditu

res

and

Rec

urrin

g R

even

ues

- Per

Cap

ita

Per C

apita

Gro

ss R

even

ues

Per C

apita

Gro

ss E

xpen

ditu

res


NYS Comptroller

NYS Comptroller

NYS Comptroller

NYS Comptroller


Indicator 2: Real Property Taxes Receivable

Purpose: To identify trends in a local government�s collection of real property taxrevenues. (For most towns and certain villages whose real property taxes areguaranteed by counties, this indicator would not be applicable).

Measurement: The relationship of real property taxes receivable to total real propertytax revenue.

Formula: Real Property Taxes Receivable Real Property Tax Revenues

Negative Trend: The percentage increasing over time.

Recommended Funds to Review: All funds with general property taxes.

Analysis: Real property taxes receivable as a percentage of real property tax revenueprovides a measure of a municipality�s collection efforts/success. Since municipalitiesfrequently guarantee tax levies of other local governments, there is no fixed benchmarkthat can be cited for this indicator. What needs to be observed is the movement of theindicator over time. Receivables increasing at a greater rate than revenues (percentageis increasing over time) would have a negative impact on the financial condition of thelocal government and could indicate that a greater number of taxpayers are eitherunwilling or unable to pay taxes at current rates. This could indicate an inability togenerate the revenues needed to finance current service levels.

Possible Practices: Vigorous enforcement of tax delinquencies helps keep thereceivable account from increasing too rapidly. When levying taxes, an adequateamount for taxes deemed to be uncollectible and for tax revenues deemed unavailable(deferred tax revenues) should be included to ensure that sufficient real property taxrevenues are generated.

NYS Comptroller

Fund

s A

ggre

gate

d:A Fo

rmul

a

Rea

l Pro

pert

y Ta

x R

ecei

vabl

es

Rea

l Pro

pert

y Ta

x R

even

ues

Rea

l Pro

pert

y Ta

x R

ecei

vabl

es a

s %

of R

eal P

rope

rty

Tax

Rev

enue

s

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Real

Pro

perty

Tax

Rec

eiva

bles

$4

0,39

8,83

4 $4

2,74

3,02

5 $4

0,70

6,93

0 $4

1,46

5,08

4 $4

2,28

1,21

5 $5

0,33

3,82

4

Real

Pro

perty

Tax

Rev

enue

s $3

6,74

6,33

1 $3

7,16

0,25

9 $3

7,68

4,70

2 $3

6,10

3,68

7 $3

5,42

7,88

6 $3

3,51

0,55

9

Real

Pro

perty

Tax

Rec

eiva

bles

as

% o

f Rea

l Pro

perty

Tax

Rev

enue

s $1

09.9

4%

115.

02%

10

8.02

%

114.

85%

11

9.34

%

150.

20%

109.9

411

5.02

108.0

211

4.85

119.3

4

150.2

0

020406080100

120

140

160

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 2 -

Rea

l Pro

pert

y Ta

x R

ecei

vabl

es


NYS Comptroller

NYS Comptroller


Indicator 3: Fixed Costs - Personal Services and Debt Service

Purpose: To identify how much of a local government�s total costs are fixed bypersonal service and debt obligations.

Measurement: The relationship of costs for salaries, fringe benefits and debt service tototal operating expenditures.

Formula: a. Salaries and Fringe BenefitsGross Expenditures

b. Debt Service ExpendituresGross Expenditures

c. Salaries and Fringe Benefits + Debt ServiceGross Expenditures

Negative Trend: Percentages increasing over time.


Analysis: The higher the relative level of personal services and debt serviceexpenditures, the less flexibility local officials have to respond to economic changes.The generally fixed nature of these expenditures makes it more difficult to adjust servicelevels if resources decline. The services that the local government offers impact on thelevel of personal service expenditures. For example, a town that provides policeprotection will have a higher percentage of personal services costs to total expendituresthan a similar town that does not. Therefore, the best test for reasonableness here is tocompare the local government with other similar governments that provide the samelevel of services. Since there is no established benchmark for this indicator, the usershould review the trend in this indicator over time. If the ratio is increasing, it indicatesthat the local government is losing its ability to adapt to changing circumstances.

Possible Practices: To better manage fixed costs, local officials should keep salaryrates and fringe benefits consistent with similar local governments in the region. Inaddition, overtime should be kept at a minimum. In order to limit debt service costs,local officials should ensure that proper equipment maintenance programs aredeveloped and followed in order to extend the useful life and trade-in value ofequipment.

Fund

s A

ggre

gate

d:A

, V

Form

ula:

Sala

ries

and

Frin

ge B

enef

its

G

ross

Exp

endi

ture

s

D

ebt S

ervi

ceG

ross

Exp

endi

ture

s

Tot

al F

ixed

Cos

tsG

ross

Exp

endi

ture

s

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Sala

ries

and

Frin

ge B

enef

its

$75,

796,

038

$79,

218,

857

$80,

873,

636

$82,

954,

427

$86,

470,

182

$0

De

bt S

ervi

ce

$38,

563,

209

$34,

325,

393

$29,

317,

096

$22,

818,

549

$21,

798,

421

$13,

364,

363

To

tal F

ixed

Cos

ts

$75,

796,

038

$79,

218,

857

$80,

873,

636

$82,

954,

427

$86,

470,

182

$0

Gr

oss

Expe

nditu

res

$265

,495

,407

$2

77,3

91,9

57

$289

,703

,390

$3

06,5

71,0

11

$327

,000

,234

$0

Sala

ries

and

Frin

ge B

enef

its a

s %

of G

ross

Exp

endi

ture

s 25

.38%

25

.32%

25

.25%

25

.09%

24

.68%

25

.35%

Debt

Ser

vice

as

% o

f Gro

ss E

xpen

ditu

res

5.34

%

10.9

7%

9.15

%

6.90

%

6.22

%

3.67

%

To

tal F

ixed

Cos

ts a

s %

of G

ross

Exp

endi

ture

s 33

.04%

36

.29%

34

.40%

31

.99%

30

.90%

29

.02%

5.34

25.38

33.04

25.32

36.29

25.25

34.40

25.09

31.99

24.68

30.90

25.35

29.02

0%10%

20%

30%

40%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 3 -

Fixe

d C

osts

as

% o

f Gro

ss E

xpen

ditu

res

Sala

ries

and

Frin

ge B

enef

its a

s %

of

Gro

ss E

xpen

ditu

res

Deb

t Ser

vice

as

% o

f Gro

ssEx

pend

iture

s

Tota

l Fix

ed C

osts

as

% o

f Gro

ssEx

pend

iture

s

5.34

10.97

9.15

6.90

6.22

3.67


NYS Comptroller

NYS Comptroller

NYS Comptroller

NYS Comptroller


Indicator 4: Operating Surplus/Deficit

Purpose: To identify trends in revenues, recurring revenues, expenditures and theresulting surpluses or deficits.

Measurement: The relationship of operating results (gross revenues less grossexpenditures) to total operations (gross expenditures).

Formula: a. Gross Revenues - Gross ExpendituresGross Expenditures

b. Gross Revenues - Gross Expenditures - One-Time RevenuesGross Expenditures

Negative Trend: Percentages decreasing over time.

Recommended Funds to Review: This indicator is displayed individually for eachmajor governmental operating fund.

Analysis: The annual operating surplus or operating deficit is the difference between agovernment�s revenues and expenditures for a fiscal year. If expenditures exceedrevenues, the government has an operating deficit. If revenues exceed expenditures,the government has an operating surplus. Over time, operating deficits of one year mayoffset operating surpluses of another year. Several successive years of operatingdeficits could cause financial hardship for a local government. Each year�s operatingsurplus or deficit is added to or subtracted from a local government�s fund balance. Agovernment�s fund balance is the total accumulation of all operating surpluses anddeficits since the beginning of that local government�s existence. Therefore, Indicator 4is related to Indicator 5 (Unreserved Fund Balance and Appropriated Fund Balance).

Indicator 4a is expressed as a percentage of the local government�s expenditures. Thisdepicts how large or small the surplus or deficit is in relation to each fund�s operationsfor the year. A local government may experience an operating deficit when using fundbalance to finance current operations. Continued use of fund balance for this purposecould create fiscal problems. Reviewers should consider the results of several years ofoperation, not just the most recent year, and also review fund balance (Indicator 5) inanalyzing Indicator 4.

NYS Comptroller

NYS Comptroller


Indicator 4b addresses one-time non-recurring revenues. (One-time revenue is a termused to describe revenue that is not derived from a government�s normal operatingcycle and, therefore, cannot be relied upon from year to year). These revenues aresubtracted from the fund surplus or deficit to present a more conservative picture of theresults of operations. This indicator measures only those recurring, more reliablerevenues as they compare to expenditures. The difference is then expressed as apercentage of gross (total) expenditures. Using one-time revenues to finance recurringexpenditures could create fiscal problems, because future budgets have to provide fornew revenues to compensate for past one-time revenues. However, the appearance ofone-time revenues in this indicator is not necessarily an indication that such revenueswere used to finance recurring expenditures. The one-time revenue may have beenused to finance one-time expenditures, such as using the proceeds from the sale of realproperty to purchase a piece of equipment. Further analysis to determine the use ofone-time revenues is necessary.

Possible Practices: Local governments should try to avoid large fluctuations inoperations. One-shot revenues (including available fund balance) should not be reliedupon to balance annual budgets. Their use should be limited to the financing ofnon-recurring expenditures.

Fund

: A

Form

ula:

Gro

ss R

even

ues

- Gro

ss E

xpen

ditu

res

G

ross

Exp

endi

ture

s

Gro

ss R

even

ues

- Gro

ss E

xpen

ditu

res

- One

Tim

e R

even

ues

Gro

ss E

xpen

ditu

res

1.71

1.71

3.33.3

2.04

1.39

4.72

4.72

4.07

4.07

-2.3

-2.3

-4%

-2%0%2%4%6%8%10%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 4 -

Ope

ratin

g Su

rplu

s/D

efic

it

Surp

lus/

Def

as

% o

f Exp

endi

ture

sSu

rplu

s/D

ef-O

ne T

ime

Rev

as

% o

f Exp

endi

ture

s

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Gros

s Re

venu

es

$270

,036

,404

$2

86,4

53,1

41

$295

,627

,130

$3

21,0

49,5

52

$340

,313

,186

$3

40,7

88,8

06

Gr

oss

Expe

nditu

res

$265

,495

,407

$2

77,3

91,9

57

$289

,703

,390

$3

06,5

71,0

11

$327

,000

,234

$3

48,8

11,0

58

Su

rplu

s/De

ficit

$4,5

40,9

97

$9,1

51,1

84

$5,9

23,7

40

$14,

478,

541

$13,

312,

952

($8,

022,

252)

Surp

lus/

Defic

it as

% o

f Gro

ss E

xpen

ditu

res

1.71

%

3.30

%

2.04

%

4.72

%

4.07

%

-2.3

0%

On

e Ti

me

Reve

nues

$0

$0

$1

,900

,113

$0

$0

$0

Surp

lus/

Def-O

ne T

ime

Rev

as %

of G

ross

Exp

endi

ture

s 1.

71%

3.

30%

1.

39%

4.

72%

4.

07%

-2

.30%


NYS Comptroller

NYS Comptroller

NYS Comptroller


****Indicators continue on the following page****


Analysis: A positive fund balance provides local officials with options to help deal withrevenue shortfalls or expenditure overruns. Reviewers of this information should alsopay attention to this indicator over time. Continuous reductions in fund balance couldindicate unstructured budgets that could lead to future budgetary problems for the localgovernment even if the current fund balance is positive. Even more significant is a fundbalance that is negative, or what is known as a deficit fund balance. Generally, thelarger any deficit as a percentage of expenditures, the more difficult it will be for thegovernment to eliminate the deficit. This situation could have serious implications forthe government�s ability to provide services at current levels. Deficits in major funds inexcess of 1.5% of fund expenditures or $50,000 (whichever is greater) are generallycauses for concern.

Appropriated fund balance information can provide another explanation for anydeclining fund balances. Annual appropriations of available fund balance wouldnormally reduce unreserved fund balance each year. However, favorable budgetvariances (revenue and/or expenditure) could offset some, or all, of this otherwisenegative trend.

Possible Practices: Careful budgeting, long-term planning, proper use of reserves andcapital asset maintenance help governments insulate themselves from unexpectedmajor costs and thereby keep expenditures within revenue limits and stabilize fundbalances. Such practices will also allow local managers to maintain a reasonable levelof fund balance, providing yet another insulating benefit.

Formula: a. Unreserved Fund BalanceGross Expenditures

b. Appropriated Fund BalanceGross Expenditures


Recommended Funds to Review: This indicator is displayed individually for eachfund a government maintains, except enterprise funds.

Indicator 5: Unreserved Fund Balance and Appropriated Fund Balance

Purpose: To identify trends in a local government�s fund balance.

Measurement: The relationship of unreserved fund balance and of appropriated fundbalance to total operations (gross expenditures).

NYS Comptroller

NYS Comptroller

Fund

: A

Form

ula:

Unr

eser

ved

Fund

Bal

ance

Gro

ss E

xpen

ditu

res

App

ropr

iate

Fun

d B

alan

ce G

ross

Exp

endi

ture

s

Unr

eser

ved

and

App

ropr

iate

d Fu

nd B

alan

ce a

s %

of G

ross

Exp

endi

ture

s

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Unre

serv

ed F

und

Bala

nce

$15,

953,

681

$23,

753,

289

$28,

842,

359

$43,

380,

330

$54,

328,

627

$36,

569,

746

Ap

prop

riate

d Fu

nd B

alan

ce

$774

,865

$0

$3

,900

,000

$9

07,7

92

$16,

830,

000

$15,

000,

000

Gr

oss

Expe

nditu

res

$265

,495

,407

$2

77,3

91,9

57

$289

,703

,390

$3

06,5

71,0

11

$327

,000

,234

$3

48,3

11,0

58

Un

rese

rved

Fun

d Ba

lanc

e as

% o

f Gro

ss E

xpen

ditu

res

6.01

%

8.56

%

9.96

%

14.1

5%

16.6

1%

10.4

8%

Ap

prop

riate

d Fu

nd B

alan

ce a

s %

of G

ross

Exp

endi

ture

s 0.

29%

0.

00%

1.

35%

0.

30%

5.

15%

4.

30%

6.01

.29

8.56

09.9

6

1.35

14.15

.3

16.61

5.15

10.48

4.3

0%10%

20%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 5 -

Unr

eser

ved

Fund

Bal

ance

and

App

ropr

iate

d Fu

nd B

alan

ce

Unr

eser

ved

FB a

s a

% o

f Gro

ss E

xpen

ditu

res

Appr

opria

ted

FB a

s a

% o

f Gro

ss E

xpen

ditu

res


NYS Comptroller

NYS Comptroller

NYS Comptroller


Indicator 6: LiquidityCash and Investment as a Percentage of Current LiabilitiesCash and Investments as a Percentage of Gross Monthly Expenditures

Purpose: To identify trends in a local government�s year-end cash balances.

Measurement: The ability to liquidate current liabilities or to fund ensuing operationsfrom available cash:

6a. Measures the amount of cash on hand at the end of the year in relationto the amount of current liabilities.

6b. Measures the amount of cash on hand at the end of the year in relationto gross monthly expenditures.

Formula: a. Cash and InvestmentsCurrent Liabilities

b. Cash and InvestmentsGross Expenditures/12


Recommended Funds to Review: This indicator is an aggregate of all the fundsincluded in the analysis. Individual funds and other combinations can also begenerated as needed/requested.

Analysis: These indicators measure the availability of cash in relation to currentliabilities at the end of the year and to average monthly expenditures for the year. Adownward trend in these indicators (percentages are decreasing) indicates that thegovernment may be having difficulty raising the cash needed to meet its currentexpenditure needs. Real property taxes, a significant revenue source in most localgovernments, are generally collected at the beginning of the fiscal year and spent downas the year progresses. The above indicators are generated using the year-end figures,at which time cash balances are usually at their lowest, thus creating a conservativeindicator. However, a government should generally have year-end cash equal to about50% of current liabilities and 75% of average monthly expenditures.

Possible Practices: Cash flow analysis helps identify moneys available for investmentin longer-term instruments (as authorized by law), thereby maximizing investmentyields. Vigorous collection of receivables helps speed up the receipt of cash, making itavailable for investment sooner. Cash collections may be enhanced through timelyfiling of claims, improved billing cycles and stricter enforcement efforts. Extending ordelaying cash disbursements can also have a positive effect on cash flow.

NYS Comptroller

NYS Comptroller

Fund

s A

ggre

gate

d:A Fo

rmul

a:

Cas

h an

d In

vest

men

t

Cur

rent

Lia

bilit

ies

Cas

h &

Inve

stm

ents

as

% C

urre

nt L

iabi

litie

s

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Cash

and

Inve

stm

ents

$2

5,03

0,57

1 $3

7,95

3.53

9 $4

9,01

0,37

7 $5

3,18

8,34

8 $6

4,77

8,33

4 $6

6,63

4,20

0

Curr

ent L

iabi

litie

s $4

8,71

4,71

6 $5

6,88

8,75

8 $4

9,44

6,87

4 $4

2,75

0,08

8 $5

2,00

3,52

2 $6

6,79

8,35

2

Cash

and

Inve

stm

ents

as

a %

of C

urre

nt L

iabi

litie

s 51

.38%

66

.72%

99

.12%

12

4.42

%

124.

57%

99

.75%

51.38

66.72

99.12

124.4

212

4.57

99.75

0%26%

52%

78%

104%

130%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 6a

- Liq

uidi

ty


NYS Comptroller

NYS Comptroller

Fund

s A

ggre

gate

d:A Fo

rmul

a:

Cas

h an

d In

vest

men

t

G

ross

Exp

endi

ture

s/12

Cas

h &

Inve

stm

ents

as

% o

f Gro

ss M

onth

ly E

xpen

ditu

res

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Cash

and

Inve

stm

ents

$2

5,03

0,57

1 $3

7,95

3,53

9 $4

9,01

0,37

7 $5

3,18

8,34

8 $6

4,77

8,33

4 $6

6,63

4,20

0

Gros

s Ex

pend

iture

s $2

65,4

95,4

07

$277

,391

,957

$2

89,7

03,3

90

$306

,571

,011

$3

27,0

00,2

34

$348

,811

,058

Gros

s Ex

pend

iture

s/12

$2

2,12

4,61

7 $2

3,11

5,99

6 $2

4,14

1,94

9 $2

5,54

7,58

4 $2

7,25

0,02

0 $2

9,06

7,58

8

Cash

Inve

stm

ents

as

a %

of G

ross

Mon

thly

Exp

endi

ture

s 11

3.13

%

164.

19%

20

3.01

%

208.

19%

23

7.72

%

229.

24%

113.13

164.19

203.01

208.19

237.72

229.24

0%80%

160%

240%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 6b

- Liq

uidi

ty


NYS Comptroller

NYS Comptroller


****Indicators continue on the following page****


Indicator 7: Long-Term Debt

Purpose: To identify trends in a local government�s use of debt as a financing sourcein relation to the population of the local government.

Measurement: The amount of year-end outstanding long-term debt per capita. Thismeasures the debt principal burden that must be borne by each individual in the localgovernment.

Formula: Long Term Debt Population

Negative Trend: Percentage increasing over time.

Recommended Funds to Review: General long-term debt group of accounts (and allmajor governmental operating funds plus enterprise funds, combined as necessary).

Analysis: Increased levels of debt can mean that local officials have a decreasing levelof flexibility in how they allocate resources, which could lead to difficulty in maintainingthe current level of services. This indicator is related to Indicator 3 (Debt Service/Expenditures). An increase in Indicator 7 would most likely trigger a subsequentincrease in Indicator 3. If long-term debt per capita is increasing, it is important toidentify the expenditures being financed by the new debt. When a government usesdebt to finance expenditures that previously had been financed with recurring revenues,it could be a sign that the government is having difficulty raising the revenues needed tofinance current operations. A related indicator in this case is Indicator 8 (CapitalOutlay). As increased debt replaces current funds to finance capital expenditures,Indicator 8 will decrease.

Possible Practices: Local managers should review the existence and condition ofmunicipal capital assets and plan for proper maintenance and replacement. Theplanned replacement of costly capital assets may reduce the need for, or level of, debtto be issued. Similarly, proper maintenance may extend the useful life of theseexpensive assets or it may result in a higher trade-in value when a replacement isneeded. In general, local government managers should limit the issuance of debt to thepurchase of larger (more expensive) capital assets.

NYS Comptroller

Fund

s: A

, W

Form

ula: Lo

ng T

erm

Deb

t

Popu

latio

n55

6

395

353

307

201

281

080160

240

320

400

480

560

640

Dollar

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 7 -

Long

Ter

m D

ebt

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Long

Ter

m D

ebt

$162

,788

,895

$1

15,6

92,1

01

$103

,213

,792

$8

9,90

3,04

7 $5

9,35

1,56

3 $8

2,76

2,39

1

Popu

latio

n 29

2,79

3 29

2,79

3 29

2,79

3 29

2,79

3 29

4,56

5 29

4,56

5

Long

Ter

m D

ebt P

er C

apita

$5

56

$395

$3

53

$307

$2

01

$281


NYS Comptroller

NYS Comptroller


Indicator 8: Capital Outlay

Purpose: To identify trends in a local government�s use of operating funds to financecapital expenditures.

Measurement: The relationship of capital outlay (expenditures for equipment andtransfers to the capital projects fund) to gross operating expenditures.

Formula: Capital Outlay Gross Expenditures

Negative Trend: Percentage decreasing over time.


Analysis: Capital outlay consists of expenditures to maintain or improve a localgovernment�s infrastructure or to acquire fixed assets. This indicator measures theextent to which a local government uses current operating funds to finance capitaloutlay needs. A decrease in this indicator coupled with an increase in Indicator 7 couldindicate that the local government is increasing its reliance on debt to finance capitalexpenditures. This could indicate a difficulty in raising revenues needed for currentoperations. A decrease in this indicator without a corresponding increase in Indicator 7could indicate that capital maintenance expenditures are being reduced. This couldhave long-term implications if deteriorating infrastructure leads to higher future capitalmaintenance spending.

This indicator can provide a very early warning of fiscal stress. Since neglecting capitalexpenditures does not have an immediate impact on services, governmentsexperiencing financial difficulties may see these expenditures as a convenient place tocut the budget.

Possible Practices: Local officials should review the existence and condition of capitalassets and plan for routine maintenance and replacement. In general, fiscal managersshould limit the use of debt to larger (more expensive) capital improvements andequipment purchases.

NYS Comptroller

Fund

s A

ggre

gate

dA Fo

rmul

a:

Cap

ital O

utla

yG

ross

Exp

endi

ture

s

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Capi

tal O

utla

y $1

,018

,948

$1

,763

,175

$1

410,

962

$2,0

39,1

44

$1,6

40,0

02

$2,5

39,7

83

Gr

oss

Expe

nditu

res

$265

,495

,407

$2

77,3

91,9

57

$289

,703

,390

$3

06,5

71,0

11

$327

,000

,234

$3

43,8

11,0

58

Ca

pita

l Out

lay

as a

% o

f Gro

ss E

xpen

ditu

res

0.38

%

0.64

%

0.49

%

0.67

%

0.50

%

0.73

%

0.38

0.64

0.49

0.67

0.50

0.73

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 8 -

Cap

ital O

utla

y as

% o

f Gro

ss E

xpen

ditu

res


NYS Comptroller

NYS Comptroller


Indicator 9: Current Liabilities

Purpose: To identify trends in outstanding short-term debt and payables.

Measurement: The relationship of current liabilities to gross operating revenues. If thispercentage increases over time, it signals potential liquidity problems.

Formula: Current Liabilities Gross Revenues



Analysis: This indicator compares the amount of a local government�s liabilities with itsability to pay off those liabilities based on future revenues. An increase in this indicatorcould point to a reduced ability to pay bills in a timely fashion. An increasing trend,coupled with a decrease in Indicator 6a (Cash and Investments as a Percentage ofCurrent Liabilities), could indicate cash-flow problems for a local government. Inanalyzing this indicator, it is important to identify which liabilities have been increasing(since the indicator combines a number of balance sheet accounts).

Possible Practices: Reducing the collection cycles for receivables (the time it takes toconvert receivables into cash) could improve cash flow and provide monies to reduceoutstanding liabilities. See also Possible Practices included with Indicator 6. Tightercontrols over spending may also be needed to improve this indicator.

NYS Comptroller

Not

es:

Fund

s A

ggre

gate

d:A Fo

rmul

a:

Cur

rent

Lia

bilit

ies

Gro

ss R

even

ues

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Curre

nt L

iabi

litie

s $4

8,71

4,71

6 $5

6,88

8,75

8 $4

9,44

6,87

4 $4

2,75

0,08

8 $5

2,00

3,52

2 $6

6,79

8,35

2

Gros

s Re

venu

es

$270

,036

,404

$2

86,5

43,1

41

$295

,627

,130

$3

21,0

49,5

52

$340

,313

,186

$3

40,7

88,8

06

Cu

rrent

Lia

bilit

ies

as a

% o

f Gro

ss R

even

ues

18.0

4%

19.8

5%

16.7

3%

13.3

2%

15.2

8%

19.6

0%

18.04

19.85

16.73

13.32

15.28

19.60

0%4%8%12%

16%

20%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 9 -

Cur

rent

Lia

bilit

ies


NYS Comptroller

NYS Comptroller


Formula: Intergovernmental Revenues Gross Revenues



Analysis: This indicator measures the extent to which a local government�s operationsare supported by intergovernmental revenues from state and federal sources. Itcompares state and federal revenues to total fund revenues. There are budgetary risksassociated with revenues received from other governments. Because a localgovernment does not directly control many of these revenues, there is greater risk thatthe revenues may not be available to fund operations. This is particularly true ofintergovernmental revenues such as grants or entitlements that require no action by thelocal government. Changes in state or federal policy or solvency could have asignificant impact on local government revenue streams. (There is somewhat less riskassociated with state and federal revenues that are dependent on local action. Theserevenues often represent expenditure reimbursements or matching funds.) In general,the higher the percentage of operations funded by intergovernmental revenues, thegreater the revenue risk that a local government bears.

Possible Practices: A local government may reduce the risks associated withintergovernmental revenues through sound budgeting practices. Developing localsources of revenue will lessen the relative effect of any reductions in state and federalrevenues. Further, restricting the use of such revenues to finance either non-recurringor capital expenditures can mitigate the adverse impact of subsequent revenue cuts onthe day-to-day operations of the local government. This practice would help ensure thatexpected services are maintained despite any interruptions in the intergovernmentalrevenue stream.

Indicator 10: Intergovernmental Revenues

Purpose: To identify trends in state and federal revenues as financing sources for alocal government.

Measurement: The relationship of intergovernmental revenues to gross revenues.

NYS Comptroller

Fund

s A

ggre

gate

d:A Fo

rmul

a:

Inte

rgov

ernm

enta

l Rev

enue

s

Gro

ss R

even

ues

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Inte

rgov

ernm

enta

l Rev

enue

s $9

4,33

1,37

7 $9

9,18

5,96

8 $1

01,2

00,5

50

$111

,109

,321

$1

16,5

97,2

70

$120

,140

,070

Gros

s Re

venu

es

$270

,036

,404

$2

86,5

43,1

41

$295

,627

,130

$3

21,0

49,5

52

$340

,313

,186

$3

40,7

88,8

06

In

terg

over

nmen

tal R

even

ues

as a

% o

f Gro

ss R

even

ues

34.9

3%

34.6

1%

34.2

3%

34.6

1%

34.2

6%

35.2

5%

34.93

34.61

34.23

34.61

34.26

35.25

0%10%

20%

30%

40%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 10

- Int

ergo

vern

men

tal R

even

ues


NYS Comptroller

NYS Comptroller


Indicator 11: Economic Assistance Costs

Purpose: To identify trends in economic assistance costs (for counties only).

Measurement: The relationship of economic assistance costs to gross expenditures.

Formula: Economic Assistance Costs Gross Expenditures


Recommended Funds to Review: This indicator applies to financial data reported inthe county general fund.

Analysis: This indicator measures the extent to which economic assistanceexpenditures impact a county�s general fund operations. Total expenditures for the localshare of state and federal social service programs are compared to total general fundexpenditures. Economic assistance costs represent the county�s share of state andfederally mandated social programs. As such, other governments largely control thelevel of these costs. These expenditures as a percentage of the county�s general fundbudget represent that portion of operations where local governments have limitedbudgetary discretion. Any budget modifications necessitated by fiscal problems mustbe made to other (non-mandated) services. Since state and federal funds are providedfor these services, this factor should be analyzed in conjunction with Indicator 10.

Possible Practices: Because of the relative magnitude of economic assistance costs,from a fiscal health standpoint it is important that the programs be run efficiently at thelocal level. In addition to implementing cost-effective procedures, local financialmanagers should ensure that accounting systems accurately capture all eligibleprogram costs and that claims for related state and federal aid are submitted promptly.Such practices will help maximize cash flow in this area of operations.

NYS Comptroller

Fund

s A

ggre

gate

d:A Fo

rmul

a:

Econ

omic

Ass

ista

nce

Cos

ts G

ross

Exp

endi

ture

s

Econ

omic

Ass

ista

nce

as %

of G

ross

Ope

ratin

g Ex

pend

iture

s

49.39

52.01

52.68

53.17

52.78

51.26

47%

48%

49%

50%

51%

52%

53%

54%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 11

- Eco

nom

ic A

ssis

tanc

e C

osts

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Econ

omic

Ass

ista

nce

Cost

s $1

31,1

20,7

19

$144

,266

,918

$1

52,6

19,0

11

$163

,010

,064

$1

72,5

79,7

99

$178

,801

,876

Gros

s Ex

pend

iture

s $2

65,4

95,4

07

$277

,391

,957

$2

89,7

03,3

90

$306

,571

,011

$3

27,0

00,2

34

$348

,811

,058

Econ

omic

Ass

ista

nce

Cost

s as

a %

of G

ross

Exp

endi

ture

s 49

.39%

52

.01%

52

.68%

53

.17%

52

.78%

51

.26%


NYS Comptroller

NYS Comptroller


Purpose: To identify trends in public safety costs (This indicator is currently available forcities and villages only).

Measurement: The relationship of public safety costs to gross operating expenditures.

Formula: Public Safety Cost Gross Expenditures


Recommended Funds to Review: This indicator applies to financial data reported inthe city and village general funds.

Analysis: This indicator measures the extent to which police, fire and other publicsafety expenditures impact a city or village general fund operations. Public safetyexpenditures are often one of the most costly service areas in a city or village generalfund. Further, many of the costs associated with these highly visible programs arelinked to long-term contractual agreements. These conditions can combine to create asignificant budgeting challenge. Substantial general fund resources are required tofund highly visible and demanded public safety programs over a number of years. Thisreduces the budget flexibility that local governments need to react to downward trendsin fiscal health.

Possible Practices: Utilizing short-term employment contracts and exploringcooperative arrangements with other municipalities are tools that public managers coulduse to increase budget flexibility in the public safety service area. Short-term contractswith payment provisions linked to prevailing inflation rates would provide financialmanagers with two benefits. Generally, inflation would raise certain general fundrevenues at the same rate as the contracted expenditures with no net budgetaryincrease. Subject to collective bargaining agreements, short-term contracts would alsogive managers more flexibility to adjust costs sooner in response to changes in financialconditions and/or the demand for public safety services. Partnering with othergovernments could help to spread the cost of certain services to more than onegovernment. Authorized cooperative arrangements could also help each governmentobtain needed services that may have been unaffordable in the past.

Indicator 12: Public Safety

NYS Comptroller

Fund

s A

ggre

gate

d:A Fo

rmul

a:

Publ

ic S

afet

y Ex

pend

iture

s

Gro

ss E

xpen

ditu

res

Publ

ic S

afet

y as

% o

f Gro

ss E

xpen

ditu

res

50.34

50.63

51.31

50.98

51.19

50.92

50%

50%

50%

50%

51%

51%

51%

51%

51%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 12

- Pub

lic S

afet

y

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Publ

ic S

afet

y Exp

endi

ture

s $4

5,90

5,98

1 $4

7,69

9,04

4 $4

8,81

1,92

6 $5

1,28

1,02

5 $5

2,86

1,53

9 $5

6,75

5,63

6

Gros

s Ex

pend

iture

s $9

1,18

4,47

4 $9

4,21

9,88

1 $9

5,13

3,03

0 $1

00,5

80,6

66

$103

,267

,009

$1

11,4

67,2

86

Pu

blic

Saf

ety E

xpen

ditu

res

as a

% o

f Gro

ss E

xpen

ditu

res

50.3

4%

50.6

3%

51,3

1%

50.9

8%

51.1

9%

50.9

2%


NYS Comptroller

NYS Comptroller


Indicator 13: Tax Limit Exhausted

Purpose: To identify tax limit trends used for counties, cities and villages.

Measurement: The relationship of the tax levy to the tax limit.

Formula: Tax Levy Tax Limit


Recommended Funds to Review: Not applicable.

Analysis: This indicator measures the extent to which a county, city or village hasexhausted its tax limit. The tax limit is the maximum amount of taxes that can be leviedbased on the state constitution and other applicable statutory authority. These laws limittaxes by imposing mandated ceilings linked to a five-year average of taxable fullvaluation of property. (Towns do not have such a limit.) The tax limit may apply to taxesraised for specific or general purposes. Certain debt service and capital expenditureappropriations may be added to the tax limit to increase the total taxing power.

Percentages increasing over time could be an indication that spending is growing fasterthan the real property tax base. Such trends could be the result of increased spending,the loss of other revenues, or a declining tax base. A county, city or village that is at, ornear, its tax limit has fewer financing options. This lack of options is particularly criticalbecause most local governments rely on real property taxes as a major source offinancing for operations.

Possible Practices: There are a number of actions that local governments can takethat will result in a greater tax margin, which means more taxing power available andmore options. Assuming a constant or increasing full valuation of taxable real property,any action that reduces the tax levy will result in a greater tax margin. Decreasingspending and/or increasing other revenues could reduce the tax levy. Also, using theproceeds of debt not subject to statutory limits as a financing source will have a positivelong-term effect on the tax margin. Actions that increase the average full valuation oftaxable real property of the tax base, without an increase in the tax levy, will also serveto improve the tax margin. (Some counties may increase their tax limit through boardaction, County Law Section §233.)

NYS Comptroller

Form

ula:

Perc

enta

ge o

f Tax

Lev

y Ex

haus

ted

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

20

01

Perc

enta

ge o

f Tax

Lim

it Ex

haus

ted

15.3

0%

13.6

6%

14.5

8%

14.4

4%

12.5

9%

12.5

1%

15.30

13.66

14.58

14.44

12.59

12.51

0%10%

20%

Percentage

1996

1997

1998

1999

2000

2001

Year

Indi

cato

r 13

- Tax

Lim

it Ex

haus

ted


NYS Comptroller


Indicator 14: Debt Limit Exhausted

Purpose: To identify debt limit trends.

Measurement: The relationship of outstanding non-exempt debt to the debt limit.

Formula: Total Debt Subject to Limit Debt Limit


Recommended Funds to Review: Not Applicable.

Analysis: This indicator measures the extent to which a local government hasexhausted its debt limit. With certain exceptions, outstanding debt (long-term andshort-term) is subject to the debt limit. The debt limit is the maximum amount of debtthat can be issued based on the state constitution and other applicable statutoryauthority. These laws limit the issuance of debt by imposing ceilings linked to afive-year average of taxable full valuation of property. Certain debt, such as debt issuedfor water supply and distribution, is exempt from the debt limit. There are numerousother exclusions.

An increasing percentage indicates an increased reliance on non-exempt debt. Such atrend is not necessarily a problem until the debt limit poses restrictions on prospectivedebt issues. This factor should be analyzed with Indicator 3, which shows debt servicecosts as a percentage of gross expenditures, and Indicator 7, which shows debt percapita figures.

Possible Practices: A greater debt margin means more available borrowing powerand more options. Debt strategies should be part of a local government�s long-termcapital plan. Debt levels should be managed so that additional debt can be issued asneeded to finance planned capital projects. Local governments can take a number ofactions to increase their debt margin, such as redeeming existing debt and financingnew capital projects through non-debt sources. Also, any actions that increase the fullvalue assessment of the tax base will expand the debt margin.

NYS Comptroller

Form

ula:

Tota

l Deb

t Sub

ject

to L

imit

Deb

t Lim

it

Fisc

al Y

ear:

1996

19

97

1998

19

99

2000

Pe

rcen

tage

of D

ebt L

imit

Exha

uste

d 14

.21%

13

.10%

12

.54%

11

.68%

10

.75%

14.21

13.10

12.54

11.68

10.75

0%10%

20%

Percentage

1996

1997

1998

1999

2000

Year

Indi

cato

r 14

- Deb

t Lim

it Ex

haus

ted


NYS Comptroller

NYS Comptroller


This page has been intentionally left blank


APPENDIX C DATA REQUEST FORM

OFFICE OF THE STATE COMPTROLLER Division of Municipal Affairs 110 State St. - 12th floor Albany, New York 12236 Telephone: (518) 473-5065 Fax: (518) 486-3146

Type of Local Government (please circle one): County City Town Village

Name of Local Government: _______________________ County located in: _____________________

Please check or complete the following information you would like to receive:

I. INDIVIDUAL LOCAL GOVERNMENT ANALYSIS

! Indicator 1 (Gross Revenues/Expenditures per Capita)! Indicator 2 (Real Property Tax Receivables as a percentage of Real Property Tax Revenues)! Indicator 3 (Personnel and Debt Service Costs as a percentage of Gross Expenditures)! Indicator 4 (Operating Surplus/Deficit as a percentage of Gross Expenditures)! Indicator 5 (Unreserved and Appropriated Fund Balance as a percentage of Gross Expenditures)! Indicator 6 (Cash and Investments as a percentage of Current Liabilities and Monthly Expenditures)! Indicator 7 (Long-Term Debt per Capita)! Indicator 8 (Capital Outlay as a percentage of Gross Expenditures)! Indicator 9 (Current Liabilities as a percentage of Gross Revenues)! Indicator 10 (Intergovernmental Revenues as a percentage of Gross Revenues)! Indicator 11 (Economic Assistance Costs as a percentage of Gross Expenditures Available for counties only.! Indicator 12 (Public Safety Costs as a percentage of Gross Expenditures) Available for cities and villages only.

! Indicator 13 (Tax Limit Exhausted) Available for counties, cities and villages only.! Indicator 14 (Debt Limit Exhausted)

II. PEER GROUP COMPARISON - Compares a local government with up to six other local governments of the same type.

Circle the requested indicators listed below and identify up to six other local governments of the same typefor comparison. Indicator(s): 1 2 3 6 7 8 9 10 11 12 13 14 all

INDICATE UP TO SIX OTHER LOCAL GOVERNMENTS OF THE SAME TYPE FOR COMPARISON.THIS SECTION MUST BE COMPLETED:

1. ____________________ 2. ____________________ 3. ____________________

4. ____________________ 5. ____________________ 6. ____________________

III. FULL DETAIL ANNUAL REPORT

! Detailed balance sheet, operating statement and budgetary account code information from the AnnualFinancial Reports filed by a local government for the past six years.

Name (please print): ______________________________________________________

Title: ___________________________________________________________________

Organization: ____________________________________________________________

Address: ________________________________________________________________

Telephone Number: (________)___________________ Date of Request: ___________________


APPENDIX D

Financial Indicator Codes

This appendix is intended for use with the OSC Financial Indicators 1 through 14 (see AppendixB). The account codes included here are described in detail in the OSC Accounting and ReportingManual.

Indicator 1: Revenues and Expenditures Per Capita and Recurring Revenues Per Capita

Gross Revenues � This figure is the total from the Annual Financial Report to OSCGross Expenditures � This figure is the total from the Annual Financial Report to OSCOne Time Revenues � Account codes 2655, 2660, 5700 � 5791Recurring Revenues � Gross Revenues minus One-Time RevenuesPopulation � 2000 Census (Account code 9ZPOP)

Indicator 2: Real Property Tax Receivable

Real Property Tax Receivables � Account codes 250 � 330Real Property Tax Revenues � Account codes 1001, 1002, 1019

Indicator 3: Fixed Costs

Salaries and Fringe Benefits � All account codes ending in .1, .8 and 9000 � 9189Debt Service � Account codes 9700 � 9799Total Fixed Costs � Salaries and Fringe Benefits plus Debt ServiceGross Expenditures � This figure is the total from the Annual Financial Report to OSC

Indicator 4: Operating Surplus/Deficit

Gross Revenues � This figure is the total from the Annual Financial Report to OSCGross Expenditures � This figure is the total from the Annual Financial Report to OSCOne Time Revenues � Account codes 2655, 2660, 5700 � 5791

Indicator 5: Unreserved Fund Balance and Appropriated Fund Balance

Unreserved Fund Balance � Account codes 910, 911Appropriated Fund Balance � Account code 910


Population � 2000 Census (Account code 9ZPOP)

Indicator 8: Capital Outlay

Capital Outlay � All account codes ending in .2 plus 9950.9Gross Expenditures � This figure is the total from the Annual Financial Report to OSC

Indicator 9: Current Liabilities

Current Liabilities � Account codes 600 � 626, 630 � 668Gross Revenues � This figure is the total from the Annual Financial Report to OSC

Indicator 10: Intergovernmental Revenues

Intergovernmental Revenues � Account codes 3001 � 3004, 3006 � 4997Gross Revenues � This figure is the total from the Annual Financial Report to OSC

Indicator 11: Economic Assistance (Counties only)

Economic Assistance Costs � Account codes 6000 � 6199Gross Expenditures � This figure is the total from the Annual Financial Report to OSC

Indicator 12: Public Safety

Public Safety Costs � Account codes 3000 � 3999, 9015.8Gross Expenditures � This figure is the total from the Annual Financial Report to OSC

Indicator 13: Tax Limit Exhausted � Percent of limit exhausted

Indicator 14: Debt Limit Exhausted � Percent of limit exhausted

Indicator 6: Liquidity

Cash and Investments � Account codes 200 � 223, 450 � 451Current Liabilities � Account codes 600 � 626, 630 � 668Gross Expenditures � This figure is the total from the Annual Financial Report to OSC

Indicator 7: Long Term Debt

Long Term Debt � Account codes W623, W626, W627, W628, W685, W689 All operating and E funds 623, 626, 627, 628, 685, 689

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