Centerville 2010 Management letter

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City of Centerville March 24, 2011 Page 15 Ratio Analysis The following captures a few ratios from the City’s financial statements that give some additional information for trend and peer group analysis.The peer group average is derived from information available on the website of the Office of the State Auditor. th class (population 2,500 –10,000).The majority of these ratios Different peer group averages were used for Cities of the 4 facilitate the use of economic resources focus and accrual basis of accounting at the government-wide level.A combination of liquidity (ability to pay its most immediate obligations), solvency (ability to pay its long-term obligations), funding (comparison of financial amounts and economic indicators to measure changes in financial capacity over time) and common-size (comparison of financial data with other cities regardless ofsize) ratios are shown below. Ratio CalculationSource2007200820092010 Debt to assetsTotal liabilities/total assetsGovernment-wide 33%29%33%28% 36%34%34%N/A Debt per capitaBonded debt/populationGovernment-wide $2,394$2,045$2,947$2,159 $2,673$2,677$2,713N/A Taxes per capitaTax revenues/populationGovernment-wide $485$502$518$433 $382$401$399N/A Current expenditures per capitaGovernmental fund currentGovernmental funds $596$538$545$525 expenditures/population$553$663$625N/A Capital expenditures per capitaGovernmental fund capitalGovernmental funds $510$564$826$370 expenditures/population$409$323$310N/A Capital assets % left to Net capital assets/Government-wide 82%81%82%82% depreciate - Governmentalgross capital assets70%70%68%N/A Capital assets % left to Net capital assets/Government-wide78%78%75%75% depreciate - Business-typegross capital assets68%67%67%N/A Represents the City of Centerville Peer Group ratio Debt-to-Assets Leverage Ratio (Solvency Ratio) The debt-to-assets leverage ratio is a comparison of a city’s total liabilities to its total assets or the percentage of total assets that are provided by creditors. It indicates the degree to which the City’s assets are financed through borrowings and other long-term obligations (i.e. a ratio of 50 percent would indicate half of the assets are financedwith outstanding debt). Bonded Debt per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total bonded debt by the population of the city and represents the amount of bonded debt obligation for each citizen of the city at the end of the year.The higher the amount, the more resources are needed in the future to retire these obligations through taxes, assessments or user fees.