Download Item#3 FinancialConditionAssessment

Item #3
Financial Condition Assessment
Introduction:
Using a model developed by faculty at the NC School of Government, staff has provided information on
key financial indicators for Chatham County over time (FY 2004 to FY 2008) and FY 2008 compared with
other nearby jurisdictions with similar sized populations (termed “Benchmark Counties”).
The model is designed to help us answer questions, such as:
Can we meet our obligations?
Can we continue to provide services?
Can we meet unexpected problems?
Do we have financial flexibility?
Key findings:
Chatham County is in very good financial shape. Chatham County compares favorably with
Benchmark Counties on all key indicators.
Staff noted no negative trends that need attention.
Financial Condition Assessment
Page 1
Financial Condition Assessment at Government!Wide Level
Key:
Chatham County
Benchmark/Goal
Governmental Activities
Business!Type Activities
1.30
1.20
1.10
1.00
0.90
0.80
1.30
1.20
1.10
1.00
0.90
0.80
Primary Government
Resource Flow
Total Margin
Total Margin Ratio! a ratio of one
or higher indicates that a
government lived within its
means
2004
Financial Performance
Change in Net Assets ! A positive
percent change indicates a
government's financial position
improved
Charges and Fees as a Percent of
Expenses ! A ratio of one or
higher indicates that the service
is self!sustaining
2007
2008
2004
2005
2006
2007
2008
10%
5%
0%
!5%
!10%
2005
2006
2007
2008
110%
10%
100%
0%
2005
2006
2007
2008
2006
2007
2008
2004
2005
2006
2007
2008
10%
10%
10%
5%
5%
5%
Debt Service Ratio ! Service
flexibility decreases as more
resources are committed to
annual debt service
0%
0%
2004
2005
2006
2007
2008
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
80%
60%
40%
20%
0%
90%
2005
2004
10%
5%
0%
!5%
!10%
2004
20%
2004
Resource Obligation
g
2006
10%
5%
0%
!5%
!10%
2004
Self!Sufficiency
2005
1.30
1.20
1.10
1.00
0.90
0.80
0%
2004
2005
2006
2007
2008
Resource Stock
8
6
4
2
0
Liquidity
Quick Ratio ! A high ratio
suggests a government is able to
meet its short!term obligations
8
6
4
2
0
2004
Solvency
Net Asset Ratio ! A high ratio
suggests a government is able to
meet its long!term obligations
Debt to Assets Ratio ! A high ratio
suggests a government is overly
reliant on debt for financing
assets
Capital Asset Condition Ratio ! A
high ratio suggests a government
is investing in its capital assets
2007
2008
2004
2005
2006
2007
2008
1.00
0.80
0.60
0.40
0.20
0.00
2005
2006
2007
2008
0.40
0.30
0.20
0.10
0.00
1.00
0.80
0.60
0.40
0.20
0.00
2004
2005
2006
2007
2008
0.40
0.30
0.20
0.10
0.00
2004
Capital
2006
1.00
0.80
0.60
0.40
0.20
0.00
2004
Leverage
2005
8
6
4
2
0
2005
2006
2007
2008
0.40
0.30
0.20
0.10
0.00
2004
2005
2006
2007
2008
0.75
0.75
0.75
0.50
0.50
0.50
0.25
0.25
0.25
0.00
0.00
2004
Financial Condition Assessment
2005
2006
2007
2008
0.00
2004
2005
2006
2007
2008
Page 2
Financial Condition Assessment for Enterprise Funds
Key:
Chatham County
Utility Fund
Benchmark/Goal
Waste Management Fund
Resource Flow
Total Margin
Total Margin Ratio! a ratio of one
or higher indicates that a
government lived within its
means
1.40
1.40
1.20
1.20
1.00
1.00
0.80
0.80
2004
Financial Performance
Change in Net Assets ! A positive
percent change indicates a
government's financial position
improved
Charges and Fees as a Percent of
Expenses ! A ratio of one or
higher indicates that the service
is self!sustaining
Debt Service Ratio ! Service
flexibility decreases as more
resources are committed to
annual debt service
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
15%
10%
5%
0%
!5%
2005
2006
2007
2008
130%
120%
110%
100%
90%
130%
120%
110%
100%
90%
2004
Resource Obligation
2006
15%
10%
5%
0%
!5%
2004
Self!Sufficiency
2005
2005
2006
2007
2008
40%
30%
20%
10%
0%
40%
30%
20%
10%
0%
2004
2005
2006
2007
2008
Resource Stock
Liquidity
Quick Ratio ! A high ratio
suggests a government is able to
meet its short!term obligations
6
6
4
4
2
2
0
0
2004
Solvency
Net Asset Ratio ! A high ratio
suggests a government is able to
meet its long!term obligations
2005
2006
2007
2008
0.60
4
3
2
1
0
0.40
0.20
0.00
2004
Leverage
Debt to Assets Ratio ! A high ratio
suggests a government is overly
reliant on debt for financing
assets
Capital Asset Condition Ratio ! A
high ratio suggests a government
is investing in its capital assets
2006
2007
2008
1.20
1.00
0.80
0.60
0.40
0.20
0.00
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2004
Capital
2005
2005
2006
2007
2008
0.75
0.75
0.50
0.50
0.25
0.25
0.00
0.00
2004
Financial Condition Assessment
2005
2006
2007
2008
Page 3
Financial Condition Assessment for Governmental Funds
Key:
Chatham County
General Fund
Benchmark/Goal
Total Governmental Funds
Resource Flow
Service Obligation
Service Obligation ! A ratio of one
or higher indicates that a
government lived within its
annual revenue collections
1.20
1.20
1.10
1.10
1.00
1.00
0.90
0.90
2004
Dependency
Dependency ! A high ratio may
indicate that a government is too
reliant on other governments
2005
2006
2007
2008
30%
30%
20%
20%
10%
10%
0%
Financing Obligation
bl
! Service
flexibility decreases as more
resources are committed to
annual debt service
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
2004
2005
2006
2007
2008
0%
2004
Financing Obligation
2004
2005
2006
2007
2008
10%
8%
6%
4%
2%
0%
10%
8%
6%
4%
2%
0%
2004
2005
2006
2007
2008
Resource Stock
Liquidity
Quick Ratio ! A high ratio
suggests a government is able to
meet its short!term obligations
20
15
10
5
0
10
8
6
4
2
0
2004
Solvency
Fund Balance as pecent of
expenditures
2005
2006
2007
2008
60%
60%
40%
40%
20%
20%
0%
0%
2004
Leverage
Debt as Percent of Assessed
Value
2005
2006
2007
2008
3%
3%
2%
2%
1%
1%
0%
0%
2004
Financial Condition Assessment
2005
2006
2007
2008
Page 4
2008 Financial Condition Assessment at Government!Wide Level!!Benchmarks
Governmental Activities
Business!Type Activities
1.30
1.20
1.10
1.00
0.90
0.80
1.30
1.20
1.10
1.00
0.90
0.80
Primary Government
Resource Flow
Total Margin
Total Margin Ratio! a ratio of one
or higher indicates that a
government lived within its
means
Lee
Chatham Moore Franklin
1.30
1.20
1.10
1.00
0.90
0.80
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore
Financial Performance
Change in Net Assets ! A positive
percent change indicates a
government's financial position
improved
10%
10%
10%
5%
5%
5%
0%
0%
0%
!5%
!5%
!5%
!10%
!10%
Lee
Chatham Moore Franklin
!10%
Lee
Chatham Moore Franklin
Self!Sufficiency
Charges and Fees as a Percent of
Expenses ! A ratio of one or
higher indicates that the service
is self!sustaining
20%
110%
10%
100%
0%
90%
80%
60%
40%
20%
Lee
Chatham Moore Franklin
0%
Lee
Chatham Moore
Franklin
Resource Obligation
Debt Service Ratio ! Service
flexibility decreases as more
resources are committed to
annual debt service
10%
10%
10%
5%
5%
5%
0%
0%
Lee
Chatham Moore Franklin
0%
Lee
Chatham Moore Franklin
Resource Stock
Liquidity
Quick Ratio ! A high ratio
suggests a government is able to
meet its short!term obligations
8
8
8
6
6
6
4
4
4
2
2
2
0
0
Lee
Chatham Moore Franklin
0
Lee
Chatham Moore Franklin
Solvency
Net Asset Ratio ! A high ratio
suggests a government is able to
meet its long!term obligations
1.00
0.80
0.60
0.40
0.20
0.00
1.00
0.80
0.60
0.40
0.20
0.00
Lee
Chatham Moore Franklin
1.00
0.80
0.60
0.40
0.20
0.00
Lee
Chatham Moore Franklin
Leverage
Debt to Assets Ratio ! A high ratio
suggests a government is overly
reliant on debt for financing
assets
0.40
0.40
0.40
0.30
0.30
0.30
0.20
0.20
0.20
0.10
0.10
0.10
0.00
0.00
Lee
Chatham Moore Franklin
0.00
Lee
Chatham Moore Franklin
Capital
Capital Asset Condition Ratio ! A
high ratio suggests a government
is investing in its capital assets
0.75
0.75
0.75
0.50
0.50
0.50
0.25
0.25
0.25
0.00
0.00
Lee
Financial Condition Assessment
Chatham Moore
Franklin
0.00
Lee
Chatham Moore
Franklin
Franklin
Page 5
2008 Financial Condition Assessment for Enterprise Funds!! Benchmarks
Utilities
Waste Management
Resource Flow
Total Margin
Total Margin Ratio! a ratio of one
or higher indicates that a
government lived within its
means
1.40
1.40
1.20
1.20
1.00
1.00
0.80
0.80
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Financial Performance
Change in Net Assets ! A positive
percent change indicates a
government's financial position
improved
15%
15%
10%
10%
5%
5%
0%
0%
!5%
!5%
Lee
Chatham Moore Franklin
Self!Sufficiency
Charges and Fees as a Percent of
Expenses ! A ratio of one or
higher indicates that the service
is self!sustaining
130%
130%
120%
120%
110%
110%
100%
100%
90%
90%
Lee
Chatham Moore
Franklin
Lee
Chatham Moore
Franklin
Resource Obligation
Debt Service Ratio ! Service
flexibility decreases as more
resources are committed to
annual debt service
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore
Resource Stock
Liquidity
Quick Ratio ! A high ratio
suggests a government is able to
meet its short!term obligations
6
6
4
4
2
2
0
0
Lee
Chatham Moore Franklin
Solvency
Net Asset Ratio ! A high ratio
suggests a government is able to
meet its long!term obligations
0.60
4
3
0.40
2
0.20
1
0.00
0
Lee
Chatham Moore Franklin
Leverage
Debt to Assets Ratio ! A high ratio
suggests a government is overly
reliant on debt for financing
assets
1.10
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
1.10
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
Lee
Chatham Moore Franklin
Capital
Capital Asset Condition Ratio ! A
high ratio suggests a government
is investing in its capital assets
0.75
0.75
0.50
0.50
0.25
0.25
0.00
0.00
Lee
Financial Condition Assessment
Chatham Moore
Franklin
Franklin
Page 6
2008 Financial Condition Assessment for Governmental Funds!!Benchmarks
General Fund
Total Governmental Funds
Resource Flow
Service Obligation
Service Obligation ! A ratio of one
or higher indicates that a
government lived within its
annual revenue collections
1.20
1.20
1.10
1.10
1.00
1.00
0.90
0.90
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Lee
Chatham Moore Franklin
Dependency
Dependency ! A high ratio may
indicate that a government is too
reliant on other governments
30%
30%
20%
20%
10%
10%
0%
0%
Lee
Chatham Moore Franklin
Financing Obligation
Financing Obligation ! Service
flexibility decreases as more
resources are committed to
annual debt service
10%
8%
%
6%
4%
2%
0%
10%
8%
6%
4%
2%
0%
Lee
Chatham Moore Franklin
Resource Stock
Liquidity
Quick Ratio ! A high ratio
suggests a government is able to
meet its short!term obligations
20
10
8
6
4
2
0
15
10
5
0
Lee
Chatham Moore Franklin
Solvency
Fund Balance as pecent of
expenditures
60%
60%
40%
40%
20%
20%
0%
0%
Lee
Chatham Moore Franklin
Leverage
Debt as Percent of Assessed
Value
3%
3%
2%
2%
1%
1%
0%
0%
Lee
Financial Condition Assessment
Chatham Moore Franklin
Page 7