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Budget Justifications

Using ratios to conduct financial analysis must be done with care. One year's worth of data is worth little; establishing a trend line over a period of years is the most useful approach. Using ratio analysis, we can examine liquidity, solvency, intergenerational equity, and revenue diversification. All of these factors can come together to provide a picture of the fiscal health of a government entity.

Use the financial statements from Charlottesville, Virginia, to conduct your own analysis. The statement from the year 2013 is in Tables 26.2 and 26.3; the statement from 2012 is provided in Tables 26.6 and 26.7. Statements from two years are provided to allow a comparison between years. Use the format in Table 26.6 and add an additional column for FY2012 so that the ratios can be compared side by side.

TABLE 26.1 City of Charlottesville, Virginia: Condensed Statement of Financial Position (Balance Sheet) Government Activities Business-Type Activities Total % Change 2013 2012 2013 2012 2013 2012 2012-13 Assets: Current and other assets -0.5% $ 118,730,524 $ 121,112,165 $ 37,059,160 $ 35,493,899 $ 155,789,684 $ 156,606,064 203,690,956 194,061,621 62,999,055 55,332,589 266,690,011 249,394,210 Capital Assets 6.9% Total Assets 322,421,480 315,173,786 100,058,215 90,826,488 422,479,695 406,000,274 4.1% Liabilities: 3.9% Long-Term Liabilities Other Liabilities 79,625,798 49,868,500 80,531,511 45,510,979 42,290,011 8,633,745 36,779,678 7,301,636 121,915,809 117,311,189 58,502,245 52,812,615 10.8% Total Liabilities 129,494,298 126,042,490 50,923,756 44,081,314 180,418,054 170,123,804 6.1% 105,462,444 122,164,890 37,760,064 21,862,917 143,222,508 144,027,807 -0.6% Net Position: Net Investments in Capital Assets Restricted General Government Public Safety Parks, Recreation & Culture Health & Welfare Conservation & Development Permanent Fund Unrestricted 291,453 321,917 56,303 1,272 1,520,702 162,501 85,110,590 77,957 458,127 17,299 521,103 5,327,678 162,501 60,401,741 291,453 321,917 56,303 1,272 1,520,702 162,501 96,484,985 77,957 273.9% 458,127 -29.7% 17,299 225.5% 521,103 -99.8% 5,327,678 -71.5% 162,501 0.0% 85,283,998 13.1% 11,374,395 24,882,257 Total Net Position $ 192,927,182 $ 189,131,296 $ 49,134,459 $ 46,745,174 $ 242,061,641 $ 235,876,470 2.6% TABLE 26.2 City of Charlottesville, Virginia: Statement of Financial Position (Balance Sheet), Government Funds General Fund Capital Projects Fund Debt Service Fund Social Services Fund Other Gov't. Fund Total $ 77,878 5,830 Assets: Cash & Cash Equivalents Investments Interest receivable Accounts receivable, net Taxes receivable, net Special assesments receivable Due from other governments (note 7) Due from other funds (note 8) Loans receivable (note 5) $ 18,737,769 $ 11,605,320 $ 12,201,576 14,818,113 71,632 283,472 29,142,873 3,997 2,967,586 4,532,258 3,372,154 1,100,000 $ 1,122,150 $ 43,744,693 14,818,113 71,632 15,188 304,490 29,142,873 3,997 5,363,027 13,375,679 3,372,154 1,214,601 2,314,601 512,808 Total Assets 69,393,599 17,241,575 12,201,576 596,516 7,714,966 107,148,232 4,594,182 Liabilities & Fund Balances Liabilities: Accounts Payable Accrued liabilities Due to other governments Due to other funds (note 8) Deferred Revenue 920,469 2,594,499 22,317 179,381 30,790 382,480 1,241,084 1,211,471 3,227,952 5,919,448 4,045,754 1,211,471 3,263,068 27,972,383 35,116 27,972,383 31,487,351 4,594,182 30,790 236,814 6,062,987 42,412,124 Total Liabilities Fund Balances: Nonspendable Restricted Committed Assigned Unassigned 1,100,000 8,950,111 2,597,282 172,501 176,222 359,702 12,170,786 545,723 6,737,955 3,633,160 26,989,410 1,272,501 10,031,758 21,506,023 4,936,416 26,989,410 1,303,256 0 0 0 Total Fund Balances 37,906,248 12,647,393 12,170,786 Total Liabilities & Fund Balances $ 69,393,599 $ 17,241,575 $ 12,201,576 359,702 $ 596,516 1,651,979 $ 7,714,966 64,736,108 107,148,232 Total Fund Balances Capital assets Property taxes receivable Net OPEB asset Internal Service funds Accrued interest payable Unamortized premium on bonds Bonds & Notes Payable Deferred amount of refunding Compensated absences 64,736,108 202,407,200 544,516 708,822 11,775,338 (873,896 (4,170,431 (79,149,240 (1,006,410) (2,044,825) $ 192,927,182 Net Position of Government Activities TABLE 26.3 City of Charlottesville, Virginia: Statement of Revenues, Expenditures, and Changes in Fund Balances Capital Debt Social General Fund Projects Fund Service Fund Services Fund Other Govt Funds Total $ 7,705,746 185,173 8,624,926 Revenues Taxes Fees & permits Intergovernmental Charges for services Fines Investment earnings Miscellaneous $95,714,241 2,464,889 30,031,104 5,731,381 392,763 239,096 810,274 13,668,093 4,875,921 $ 95,714,241 2,464,889 60,215,042 10,607,302 392,763 276,657 4,780,226 32,149 5,412 3,754,121 22,383 193,448 Total Revenues 135,383,748 11,465,279 217,322 8,647,309 18,737,462 174,451,120 913,557 118,276 2,309,752 14,438,666 31,444,547 7,933,104 5,012,504 11,355,857 43,065,839 4,899,680 266,562 424,609 8,281,270 14,284,562 77,414 11,899,321 15,352,223 31,987,432 18,524,126 31,196,387 12,229,739 45,526,167 8,764,632 266,562 796,468 2,460,328 2,858,009 1,006,943 Expenditures Current: General government Public safety Community service Health & welfare Parks, recreation, & culture Education Conservation & development Other activities Debt Service: Principal Interest Miscellaneous Capital Outlay Total expenditures Revenues Over Expenditures Other Financing Sources (uses) Transfers in Transfers out Issuance of debt Premium on issuance of debt 6,430,175 2,452,754 87,599 6,430,175 2,452,754 87,599 21,380,655 194,198,451 21,380,655 30,837,045 118,416,759 8,970,528 11,899,321 24,074.798 16,966,989 (19,371,766) (8,753,206) (3,252,012) (5,337,336) (19,747,331) 9,671,009 3.127.218 5,608,472 (24,751,601) 4,829,576 (37,298) 7,810,768 (319,874) 5,610,000 427,859 31,047,043 (25,108,773) 5,610,000 427,859 (19,143,129) 9,671,009 3.127.218 4,792,278 11,976,129 (2,176,140) 40,082,388 13,528,753 (5,843,013) 18,490,406 917,803 11,252,983 (124,794) 484,496 (545,058) 2,197,037 (7,771,202) 72,507,310 37,906,248 12,647,393 12,170,786 359,702 1,651,979 64,736,108 (7,771,202) Total other financing sources Net change in fund balances Fund Balance - July 1, 2012 Fund Balance - June 30, 2013 Net Change in Fund Balances Differences Change in capital assets Depreciation expense Change in school capital assets less revenues not reported in funds Debt proceeds Changes in interest Compensated absences Net OPEB obligation Net internal service funds 22,573,753 (8,291,446) (5,327,130) (173,301) 392,316 181,491 (61,076) 708,822 1,563,659 Change in Net Position of Governmental Activities $ 3,795,886 TABLE 26.6 Charlottesville, Virginia: Statement of Financial Position (Balance Sheet), Government Funds Capital Projects Fund General Social Services Fund Other Gov't. Fund Fund Total Assets: $18,734,173 $104,507 $12,923,486 $34,198,840 51,752 294,821 28,733,247 8,429 59,423 Cash & Cash Equivalents Interest receivable Accounts receivable, net Taxes receivable, net Special assesments receivable Due from other governments (note 7) Due from other funds (note 8) Loans receivable (note 5) $65,961,006 51,752 362,673 28,733,247 16,813 11,411,402 16,813 1,076,694 2,971,744 690,794 6,672,170 4,640,987 4,640.987 1,976,669 880,000 1,096,669 70,891,391 20,707,680 803,730 20,751,748 113,154,549 2,217,274 Total Assets Liabilities & Fund Balances Liabilities: Accounts Payable Accrued liabilities Due to other governments Due to other funds (note 8) Deferred Revenue 720,740 2,595,114 21,152 207,020 453,187 1,312,962 1,099,364 4,436,215 91,062 3,412,353 4,115,096 1,099,364 4,527,277 27,493,149 40,647,239 27,493,149 30,809,003 2,217,274 319,234 7,301,728 Total Liabilities Fund Balances: Nonspendable Restricted Committed Assigned Unassigned 3,143,710 15,346,696 484,496 172,501 117,934 11,252,983 1,906,602 472,056 8,206,185 4,542,491 26,861,656 40,082,388 70,891,391 3,316,211 16,421,182 19,459,168 6,449,093 26,861,656 Total Fund Balances Total Liabilities & Fund Balances 18,490,406 20,707,680 484,496 803,730 13,450,020 20,751,748 72,507,310 113,154,549 72,507,310 193,422,896 658,227 Total Fund Balances Capital assets Property taxes receivable Net OPEB asset Internal Service funds Accrued interest payable Unamortized premium on bonds Bonds & Notes Payable Deferred amount of refunding Compensated absences 10,211,679 (615,608) (4,043,536) (79,969,415) (1,056,507) (1,983,750) 189,131,296 Net Position of Government Activities TABLE 26.7 Charlottesville, Virginia: Statement of Revenues, Expenditures, and Changes in Fund Balances (Income Statement) Other Capital Projects Fund Social Services General Gov't. Fund Fund Fund Total $- $- 3,389,498 8,840,146 Revenues Taxes Fees & permits Intergovernmental Charges for services Fines Investment earnings Miscellaneous $94,311,894 2,042,063 30,558,359 5.210,751 552,075 344,491 1,035,926 18,238,598 4,855,159 $94,311,894 2,042,063 61,026,601 10,065,910 552,075 373,961 1,662,465 29,470 180,604 412,707 33,228 134,055,559 3,802,205 8,873,374 23,303,831 170,034,969 1,025,586 712,528 3,723,628 1,103,322 12,278,761 13,338,969 63,571 11,846,326 Total Revenues Expenditures Current: General government Public safety Community service Health & welfare Parks, recreation, & culture Education Conservation & development Other activities Debt Service: Principal Interest Miscellaneous Capital outlay 14,091,746 30,415,583 7,570,743 5,026,677 10,180,840 41,110,805 4,751,424 255,994 15,117,332 32,231,433 23,573,132 30,211,972 10,586,859 41,983,543 13,711,905 255,994 342,448 872,738 7,860,705 1,099.776 6,611,249 2,855,961 196,062 6,611,249 2,855,961 196,062 11.213,317 11,213,317 Total expenditures 113,403,812 25,750,950 11,846,326 37,547,671 188,548,759 Revenues over Expenditures 20,651,747 (21,948,745) (2,972,952) (14,243,840) (18,513,790) 2,969,405 5,407,971 (26,121,631) 7,338,669 (543,095) 9,133,200 16,162,967 (33,437) Other Financing Sources (uses) Transfers in Transfers out Issuance of debt Refunding bonds issued Premium on issuance of debt Payment to refunding bond escrow agent Sale of capital assets 31,879,012 (26,698,163) 9,133,200 17,737,100 3,411,666 (20,195,331) 898,495 17,737,100 2,513,171 (20,195,331) 352,000 352,000 Total other financing sources (20,713,660) 17,179,269 2,969,405 16,184,470 15,619,484 Net change in fund balances (61,913) (4,769,476) (3,547) 1,940,630 (2,894,306) Fund Balance - July 1, 2012 40,144,301 23,259,882 488,043 11,509,390 75,401,616 Fund Balance - June 30, 2013 40,082,388 18,490,406 484,496 13,450,020 72,507,310 Net Change in Fund Balances (2,894,306) TABLE 26.1 City of Charlottesville, Virginia: Condensed Statement of Financial Position (Balance Sheet) Government Activities Business-Type Activities Total % Change 2013 2012 2013 2012 2013 2012 2012-13 Assets: Current and other assets -0.5% $ 118,730,524 $ 121,112,165 $ 37,059,160 $ 35,493,899 $ 155,789,684 $ 156,606,064 203,690,956 194,061,621 62,999,055 55,332,589 266,690,011 249,394,210 Capital Assets 6.9% Total Assets 322,421,480 315,173,786 100,058,215 90,826,488 422,479,695 406,000,274 4.1% Liabilities: 3.9% Long-Term Liabilities Other Liabilities 79,625,798 49,868,500 80,531,511 45,510,979 42,290,011 8,633,745 36,779,678 7,301,636 121,915,809 117,311,189 58,502,245 52,812,615 10.8% Total Liabilities 129,494,298 126,042,490 50,923,756 44,081,314 180,418,054 170,123,804 6.1% 105,462,444 122,164,890 37,760,064 21,862,917 143,222,508 144,027,807 -0.6% Net Position: Net Investments in Capital Assets Restricted General Government Public Safety Parks, Recreation & Culture Health & Welfare Conservation & Development Permanent Fund Unrestricted 291,453 321,917 56,303 1,272 1,520,702 162,501 85,110,590 77,957 458,127 17,299 521,103 5,327,678 162,501 60,401,741 291,453 321,917 56,303 1,272 1,520,702 162,501 96,484,985 77,957 273.9% 458,127 -29.7% 17,299 225.5% 521,103 -99.8% 5,327,678 -71.5% 162,501 0.0% 85,283,998 13.1% 11,374,395 24,882,257 Total Net Position $ 192,927,182 $ 189,131,296 $ 49,134,459 $ 46,745,174 $ 242,061,641 $ 235,876,470 2.6% TABLE 26.2 City of Charlottesville, Virginia: Statement of Financial Position (Balance Sheet), Government Funds General Fund Capital Projects Fund Debt Service Fund Social Services Fund Other Gov't. Fund Total $ 77,878 5,830 Assets: Cash & Cash Equivalents Investments Interest receivable Accounts receivable, net Taxes receivable, net Special assesments receivable Due from other governments (note 7) Due from other funds (note 8) Loans receivable (note 5) $ 18,737,769 $ 11,605,320 $ 12,201,576 14,818,113 71,632 283,472 29,142,873 3,997 2,967,586 4,532,258 3,372,154 1,100,000 $ 1,122,150 $ 43,744,693 14,818,113 71,632 15,188 304,490 29,142,873 3,997 5,363,027 13,375,679 3,372,154 1,214,601 2,314,601 512,808 Total Assets 69,393,599 17,241,575 12,201,576 596,516 7,714,966 107,148,232 4,594,182 Liabilities & Fund Balances Liabilities: Accounts Payable Accrued liabilities Due to other governments Due to other funds (note 8) Deferred Revenue 920,469 2,594,499 22,317 179,381 30,790 382,480 1,241,084 1,211,471 3,227,952 5,919,448 4,045,754 1,211,471 3,263,068 27,972,383 35,116 27,972,383 31,487,351 4,594,182 30,790 236,814 6,062,987 42,412,124 Total Liabilities Fund Balances: Nonspendable Restricted Committed Assigned Unassigned 1,100,000 8,950,111 2,597,282 172,501 176,222 359,702 12,170,786 545,723 6,737,955 3,633,160 26,989,410 1,272,501 10,031,758 21,506,023 4,936,416 26,989,410 1,303,256 0 0 0 Total Fund Balances 37,906,248 12,647,393 12,170,786 Total Liabilities & Fund Balances $ 69,393,599 $ 17,241,575 $ 12,201,576 359,702 $ 596,516 1,651,979 $ 7,714,966 64,736,108 107,148,232 Total Fund Balances Capital assets Property taxes receivable Net OPEB asset Internal Service funds Accrued interest payable Unamortized premium on bonds Bonds & Notes Payable Deferred amount of refunding Compensated absences 64,736,108 202,407,200 544,516 708,822 11,775,338 (873,896 (4,170,431 (79,149,240 (1,006,410) (2,044,825) $ 192,927,182 Net Position of Government Activities TABLE 26.3 City of Charlottesville, Virginia: Statement of Revenues, Expenditures, and Changes in Fund Balances Capital Debt Social General Fund Projects Fund Service Fund Services Fund Other Govt Funds Total $ 7,705,746 185,173 8,624,926 Revenues Taxes Fees & permits Intergovernmental Charges for services Fines Investment earnings Miscellaneous $95,714,241 2,464,889 30,031,104 5,731,381 392,763 239,096 810,274 13,668,093 4,875,921 $ 95,714,241 2,464,889 60,215,042 10,607,302 392,763 276,657 4,780,226 32,149 5,412 3,754,121 22,383 193,448 Total Revenues 135,383,748 11,465,279 217,322 8,647,309 18,737,462 174,451,120 913,557 118,276 2,309,752 14,438,666 31,444,547 7,933,104 5,012,504 11,355,857 43,065,839 4,899,680 266,562 424,609 8,281,270 14,284,562 77,414 11,899,321 15,352,223 31,987,432 18,524,126 31,196,387 12,229,739 45,526,167 8,764,632 266,562 796,468 2,460,328 2,858,009 1,006,943 Expenditures Current: General government Public safety Community service Health & welfare Parks, recreation, & culture Education Conservation & development Other activities Debt Service: Principal Interest Miscellaneous Capital Outlay Total expenditures Revenues Over Expenditures Other Financing Sources (uses) Transfers in Transfers out Issuance of debt Premium on issuance of debt 6,430,175 2,452,754 87,599 6,430,175 2,452,754 87,599 21,380,655 194,198,451 21,380,655 30,837,045 118,416,759 8,970,528 11,899,321 24,074.798 16,966,989 (19,371,766) (8,753,206) (3,252,012) (5,337,336) (19,747,331) 9,671,009 3.127.218 5,608,472 (24,751,601) 4,829,576 (37,298) 7,810,768 (319,874) 5,610,000 427,859 31,047,043 (25,108,773) 5,610,000 427,859 (19,143,129) 9,671,009 3.127.218 4,792,278 11,976,129 (2,176,140) 40,082,388 13,528,753 (5,843,013) 18,490,406 917,803 11,252,983 (124,794) 484,496 (545,058) 2,197,037 (7,771,202) 72,507,310 37,906,248 12,647,393 12,170,786 359,702 1,651,979 64,736,108 (7,771,202) Total other financing sources Net change in fund balances Fund Balance - July 1, 2012 Fund Balance - June 30, 2013 Net Change in Fund Balances Differences Change in capital assets Depreciation expense Change in school capital assets less revenues not reported in funds Debt proceeds Changes in interest Compensated absences Net OPEB obligation Net internal service funds 22,573,753 (8,291,446) (5,327,130) (173,301) 392,316 181,491 (61,076) 708,822 1,563,659 Change in Net Position of Governmental Activities $ 3,795,886 TABLE 26.6 Charlottesville, Virginia: Statement of Financial Position (Balance Sheet), Government Funds Capital Projects Fund General Social Services Fund Other Gov't. Fund Fund Total Assets: $18,734,173 $104,507 $12,923,486 $34,198,840 51,752 294,821 28,733,247 8,429 59,423 Cash & Cash Equivalents Interest receivable Accounts receivable, net Taxes receivable, net Special assesments receivable Due from other governments (note 7) Due from other funds (note 8) Loans receivable (note 5) $65,961,006 51,752 362,673 28,733,247 16,813 11,411,402 16,813 1,076,694 2,971,744 690,794 6,672,170 4,640,987 4,640.987 1,976,669 880,000 1,096,669 70,891,391 20,707,680 803,730 20,751,748 113,154,549 2,217,274 Total Assets Liabilities & Fund Balances Liabilities: Accounts Payable Accrued liabilities Due to other governments Due to other funds (note 8) Deferred Revenue 720,740 2,595,114 21,152 207,020 453,187 1,312,962 1,099,364 4,436,215 91,062 3,412,353 4,115,096 1,099,364 4,527,277 27,493,149 40,647,239 27,493,149 30,809,003 2,217,274 319,234 7,301,728 Total Liabilities Fund Balances: Nonspendable Restricted Committed Assigned Unassigned 3,143,710 15,346,696 484,496 172,501 117,934 11,252,983 1,906,602 472,056 8,206,185 4,542,491 26,861,656 40,082,388 70,891,391 3,316,211 16,421,182 19,459,168 6,449,093 26,861,656 Total Fund Balances Total Liabilities & Fund Balances 18,490,406 20,707,680 484,496 803,730 13,450,020 20,751,748 72,507,310 113,154,549 72,507,310 193,422,896 658,227 Total Fund Balances Capital assets Property taxes receivable Net OPEB asset Internal Service funds Accrued interest payable Unamortized premium on bonds Bonds & Notes Payable Deferred amount of refunding Compensated absences 10,211,679 (615,608) (4,043,536) (79,969,415) (1,056,507) (1,983,750) 189,131,296 Net Position of Government Activities TABLE 26.7 Charlottesville, Virginia: Statement of Revenues, Expenditures, and Changes in Fund Balances (Income Statement) Other Capital Projects Fund Social Services General Gov't. Fund Fund Fund Total $- $- 3,389,498 8,840,146 Revenues Taxes Fees & permits Intergovernmental Charges for services Fines Investment earnings Miscellaneous $94,311,894 2,042,063 30,558,359 5.210,751 552,075 344,491 1,035,926 18,238,598 4,855,159 $94,311,894 2,042,063 61,026,601 10,065,910 552,075 373,961 1,662,465 29,470 180,604 412,707 33,228 134,055,559 3,802,205 8,873,374 23,303,831 170,034,969 1,025,586 712,528 3,723,628 1,103,322 12,278,761 13,338,969 63,571 11,846,326 Total Revenues Expenditures Current: General government Public safety Community service Health & welfare Parks, recreation, & culture Education Conservation & development Other activities Debt Service: Principal Interest Miscellaneous Capital outlay 14,091,746 30,415,583 7,570,743 5,026,677 10,180,840 41,110,805 4,751,424 255,994 15,117,332 32,231,433 23,573,132 30,211,972 10,586,859 41,983,543 13,711,905 255,994 342,448 872,738 7,860,705 1,099.776 6,611,249 2,855,961 196,062 6,611,249 2,855,961 196,062 11.213,317 11,213,317 Total expenditures 113,403,812 25,750,950 11,846,326 37,547,671 188,548,759 Revenues over Expenditures 20,651,747 (21,948,745) (2,972,952) (14,243,840) (18,513,790) 2,969,405 5,407,971 (26,121,631) 7,338,669 (543,095) 9,133,200 16,162,967 (33,437) Other Financing Sources (uses) Transfers in Transfers out Issuance of debt Refunding bonds issued Premium on issuance of debt Payment to refunding bond escrow agent Sale of capital assets 31,879,012 (26,698,163) 9,133,200 17,737,100 3,411,666 (20,195,331) 898,495 17,737,100 2,513,171 (20,195,331) 352,000 352,000 Total other financing sources (20,713,660) 17,179,269 2,969,405 16,184,470 15,619,484 Net change in fund balances (61,913) (4,769,476) (3,547) 1,940,630 (2,894,306) Fund Balance - July 1, 2012 40,144,301 23,259,882 488,043 11,509,390 75,401,616 Fund Balance - June 30, 2013 40,082,388 18,490,406 484,496 13,450,020 72,507,310 Net Change in Fund Balances (2,894,306)

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