Centerville 2010 Management letter

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City of Centerville March 24, 2011 Page 16 Taxes per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total tax revenues by the population of the city and represents the amount of taxes for each citizen of the city for the year.The higher this amount is, the more reliant the city is on taxes to fund its operations. Current Expenditures per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total current governmental expenditures by the population of the City and represents the amount of governmental expenditure for each citizen of the City during the year. Since this is generally based on ongoing expenditures, we would expect consistent annual per capita results. Capital Expenditures per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total governmental capital outlay expenditures by the population of the City and represents the amount of capital expenditure for each citizen of the City during the year. Since projects are not always recurring, the per capita amount will fluctuate from year to year. Capital Assets Percentage (Common-size Ratio) This percentage represents the percent of governmental or business-type capital assets that are left to be depreciated.The lower this percentage, the older the city’s capital assets are and may need major repairs or replacements in the near future.A higher percentage may indicate newer assets being constructed or purchased and may coincide with higher debt ratios or bonded debt per capita. Future AccountingStandard Changes The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact on future City financial statements: GASB Statement No. 54 -Fund Balance This statement was issued in March of 2009 and iseffective for periods beginning after June 15, 2010.This new standard is intended to improve the usefulness of information provided to financial report users about fund balance by providing clearer, more structured fund balance classifications, and clarifying the definitions of existing governmental fund types. GASB No. 54 distinguishes fund balance between amounts that are considered non-spendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative strength of the constraints that control the purposes for which specific amounts can be spent.The following classifications and definitions will be used: Restricted -amounts constrained by external parties, constitutional provision, or enabling legislation Committed -amounts constrained by a government using its highest level of decision-making authority Assignedintends -amounts a government to use for a particular purpose Unassigned -amounts that are not constrained at all will be reported in the general fund. In addition to the classifications of fund balance, the standard clarified the definitions of individual governmental fund types, for example, special revenue funds, debt service funds, and capital project funds.