12 May WHAT IS THE ECONOMIC OUTLOOK AND FINANCIAL CHALLENGES FOR THE CITY?
Identify
the Bond Rating of the reporting entity?
The bond rating for Culpeper
County is AA. Standard & Poors, Fitch, and Moody have all given the County
AA ratings.
(http://www.dailyprogress.com/starexponent/news/local_news/s-p-upgrades-culpeper-s-bond-rating/article_d0587455-a41b-5392-af19-9cd059182b2f.html)
What
is the economic outlook and financial challenges for the city?
I believe that the economic
outlook is positive for the County. The County has been able to have $23 million
in unassigned funds that the County is able to spend at its discretion.
However, given the history of the County, it would need to ensure that it keeps
its spending and budgets under control to avoid a shortfall similar to what
occurred in 2008. In 2008, the County suffered a shortfall and ended up having
to freeze hiring and cut positions, to avoid that happing again the County
should forecast its budget carefully.
4.
Determine
the following ratios, discuss and analyze the city’s performance accordingly: 1)
long-term debt vs. total assets, 2) debt service payments from the bond and
interest fund vs. governmental expenditures, and 3) amount of general
obligation bonds outstanding vs. population
1. Long term debt vs. total assets:
91,871,302 / 190,901,653 = 48.1%
I think the Countys long term debt to asset ratio is pretty high.
Give the Countys history; it should try to minimize the amount of debt it
takes on to lower its debt to asset ratio.
1. Total debt service payments from the bond and interest were $8,411,635.
The total governmental expenditures were $79,817,880. This ends up around
10.5%. I think that the County should work on lowering this ratio as well. It
could help the County to lessen its dependence on debt instruments used to
provide services to the residents.
2. The County had $2,546,000 in County General Obligation Bonds and
$6,932,590 in School General Obligation Bonds, for a total of $9,478,590. The
total population was 47,114. This works out to be about $201.18 in general
obligation bonds per person. I think this is a very good ratio, because the
County can operate efficiently with only each person requiring a small amount
of general obligation debt.
A.
For Fauquier County CAFR Review -analyze the governmental entity its
challenges and performance. Your analysis must include, but should not be
limited to the issues raised below. The student is required to assess the
governmental entitys performance do not repeat what is in the MD&A but
present in your own words a discussion of your assessment of the entitys
performance, using information in the CAFR and other analyses you perform to
support your conclusions. (You can see the example of assignment B example
(Culpeper County) to have an idea for assignment A.) To answer the questions,
please go to the link below for Fauquier County website(CAFR 2012).fauquiercounty.gov/government/departments/Finance/index.cfm?action=table_of_contents2012″>http://www.fauquiercounty.gov/government/departments/Finance/index.cfm?action=table_of_contents20121.What challenges does the city face based on a review of the
Management, Discussion, and Analysis?2. What are specific key performance (operating or
financial) metrics used to gauge performance
of city services? Do you agree these are good metrics to use? Why or why not?3. Identify the Bond Rating of the reporting
entity? What is the
economic outlook and financial challenges for the city?4. Determine the following ratios, discuss and analyze
the city’s performance accordingly: 1) long-term debt vs. total assets, 2) debt
service payments from the bond and interest fund vs. governmental expenditures,
and 3) amount of general obligation bonds outstanding vs. population.B. What suggestions would you make for the Culpeper County CAFR
(Below) if you were hired by the Mayor as a consultant?Your responses must further the discussion do not just agree or
disagree with the original poster (Culpeper County). Using the information
provided by the original poster and what you learned from your own analysis,
support your position. Your discussion must include at
least 7 financial ratios (identify,
calculate, and explain why you chose them) and several factors from each of the areas – environmental,
organizational, and financial. You must include an overall summary of your
conclusions.v Culpeper County CAFR Review Example1.
What
challenges does the city face based on a review of the Management, Discussion,
and Analysis?According to the Management
Discussion and Analysis, Culpeper County does not seem to be facing many
challenges. As of June 30, 2012, the Countys assets exceeded their liabilities
by $88 million. Culpeper County has about $23 million in the unassigned fund
balance. The County seems to be in better financial position than in 2008,
where it had to make spending cuts and freeze hiring. The County has planned to
increase wages for FY 2013 as well add 3 new positions. 2.
What
are specific key performance (operating or financial) metrics used to gauge
performance of city services?
Some of the economic indicators used by the County are:Population,
School enrollment, Unemployment rate, Personal income, Per capita personal
income
Some of the Operating
indicators used are: Sheriff – Physical arrest, Traffic violations, Fire
Protection Number of stations, Community development residential building
permitsParks and recreations:Number of
parks and recreation facilities, Number of libraries
Do you agree these
are good metrics to use? Why or why not?I think these are good metrics
to use, because the Countys overall health and position can be based on its
unemployment rate. Additionally, the county is able to compare the number of
public service resources it provides and the increase or decrease over time.
The County bases its employment decisions based on public safety and public
service needs. The County can use the populations statistics coupled with the
operating indicators to identify if they are over or understaffed based on the
population and number of incidents.
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