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1 RiversideCA.gov
1 RiversideCA.gov
Financial Performance and Budget Committee
May 10, 2023
FINANCIAL HEALTH INDICATORS
Finance Department
RiversideCA.gov
2 Ability to perform a key mission to provide Financial Health Indicators to open dialogue and provide clear and useful information
Discussion of financial condition based on 3 basic questions and 11 measures to evaluate financial condition
Each question evaluates Riverside’s services to its residents
PURPOSE
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3 • FHI #1 General Fund Reserve Ratio – Building up reserves which is useful in identifying deteriorating fund balance reserves. • FHI #2 General Fund Liquidity Ratio – Ability to pay expenses which is useful in identifying City’s ability to pay bills on time.
FINANCIAL POSITION
CAN THE CITY PAY ITS BILLS NOW?
RiversideCA.gov
4 5-YEAR GENERAL FUND RESERVE RATIO *
City of Riverside
FY 21-22 GENERAL FUND RESERVE RATIO – COMPARABLE CITIES * Includes Measure Z
FHI #1 GENERAL FUND RESERVE RATIO
A declining fund balance reserve can be a sign of fiscal stress. This indicator is important in identifying a trend of a deteriorating fund balance reserves as well as how rapidly it is deteriorating.
A higher ratio suggests larger reserves for dealing with unexpected resource needs in the long run.
FY 17‐18
23%
FY 18‐19
30%
FY 19‐20
36%
FY 20‐21
41%
FY 21‐22
41%
Ontario, 9%
Anaheim, 10%
Glendale, 40%
Riverside, 41%
Burbank, 55%
EE1
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5 5-YEAR GENERAL FUND LIQUIDITY RATIO *
City of Riverside
FY 21-22 GENERAL FUND LIQUIDITY RATIO – COMPARABLE CITIES FHI #2 GENERAL FUND LIQUIDITY RATIO
A declining ratio indicates a city does not have sufficient cash available to meet its current obligations as they come due. This indicator is important in identifying a trend of deteriorating cash as well as how rapidly it is deteriorating. A higher ratio suggests a greater capacity for paying off short-term obligations.
* Includes Measure Z
FY 17‐18
2.58 FY 18‐19
3.34 FY 19‐20
3.50 FY 20‐21
3.59 FY 21‐22
4.52 Ontario, 2.14
Anaheim, 2.43
Riverside, 4.52
Burbank, 5.54
Glendale, 5.60
RiversideCA.gov
6 • FHI # 3 General Government Growth in Net Position Ratio –C h a n g e in Net Assets where a growth in net position indicates City can pay its expenses with its revenue and establish appropriate reserves for future allocation.
• FHI # 4 General Government Operating Margin Ratio –C i t ys e r v i c e s are more self-sufficient through charges, fees, and grants. • FHI # 5 General Government Own Source Revenue Ratio – Reliance on tax dollars versus the City's reliance on federal and state grants.
FINANCIAL PERFORMANCE
CAN THE CITY' S REVENUES COVER ITS EXPENSES?
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7 5-YEAR GENERAL GOVERNMENT GROWTH IN NET POSITION RATIO City of Riverside
FY 21-22 GENERAL GOVERNMENT GROWTH IN NET POSITION RATIO – COMPARABLE CITIES FHI #3 GENERAL GOVERNMENT
GROWTH IN NET POSITION RATIO
Revenues from programs ideally should cover th e expenses that are incurred for those programs, otherwise reserves may need to be used to meet the needs. A higher ratio suggests that annual costs are adequately funded, and the financial condition is improving.
FY 17‐18
‐0.3%
FY 18‐19
5.0% FY 19‐20
‐0.7%
FY 20‐21
2.2%
FY 21‐22
11.5%
Glendale, 6.6%
Burbank, 7.8%
Ontario, 10.1%
Riverside, 11.5%
Anaheim, 22.2%
RiversideCA.gov
8 FY 21-22 GENERAL GOVERNMENT OPERATING MARGIN RATIO – COMPARABLE CITIES 5-YEAR GENERAL GOVERNMENT OPERATING MARGIN RATIO
City of Riverside
FHI #4 GENERAL GOVERNMENT
OPERATING MARGIN RATIO
A city charges for services and may receive grants and aid from other governments (e.g. Federal and State). A higher ratio suggests basic government services are more self-sufficient through charges, fees, and grants and less reliant on general tax dollars to fund program expenditures.
FY 17‐18
22%
FY 18‐19
29% FY 19‐20
21%
FY 20‐21
30%
FY 21‐22
39%
Riverside, 39%
Burbank, 45%
Glendale, 56%
Anaheim, 65%
Ontario, 69%
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9 5-YEAR GENERAL GOVERNMENT OWN SOURCE REVENUE RATIO
City of Riverside
FY 21-22 GENERAL GOVERNMENT OWN SOURCE REVENUE RATIO – COMPARABLE CITIES FHI #5 GENERAL GOVERNMENT
OWN SOURCE REVENUE RATIO
Revenues from grants are used to support some City functions. Other functions, such as public safety, are mainly funded by general tax dollars. This ratio illustrates the extent to which government revenues were supported by grants. A lower ratio suggests that the City is not heavily reliant on grants and more reliant on general tax dollars and charges for services.
FY 17‐18
13%
FY 18‐19
15% FY 19‐20
12%
FY 20‐21
23% FY 21‐22
21%
Anaheim, 37%
Glendale, 29%
Riverside, 21%
Burbank, 20%
Ontario, 19%
RiversideCA.gov
10 • FHI # 6 General Government Near-Term Solvency Ratio – Ability to pay obligations with annual revenues where fewer number of years of annual revenue needed to pay City
obligations the stronger its financial condition.
• FHI # 7 General Government Debt, Pension Liability & Other Post-Employment Benefits (OPEB) Burden per Resident –
Amount of liability per resident where lower liability per capita results in smaller debt, pension, and OPEB burden on
taxpayers.
LONG-TERM SOLVENCY
CAN THE CITY PAY ITS BILLS IN THE FUTURE?
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11 5-YEAR GENERAL GOVERNMENT NEAR-TERM SOLVENCY RATIO
City of Riverside
FY 21-22 GENERAL GOVERNMENT NEAR-TERM SOLVENCY RATIO – COMPARABLE CITIES FHI #6 GENERAL GOVERNMENT
NEAR-TERM SOLVENCY RATIO
This ratio demonstrates a City’s ability to pay a larger portion of its debts with annual revenues. A lower ratio indicates a stronger financial condition.
FY 17‐18
2.80 FY 18‐19
2.43 FY 19‐20
3.49 FY 20‐21
2.25 FY 21‐22
1.69 Anaheim, 1.78
Riverside, 1.69
Glendale, 1.46
Ontario, 1.16
Burbank, 0.99
RiversideCA.gov
12 5-YEAR GENERAL GOVERNMENT DEBT, PENSION LIABILITY & OPEB BURDEN PER RESIDENT RATIO City of Riverside
FY 21-22 GENERAL GOVERNMENT DEBT, PENSION LIABILITY & OPEB BURDEN PER RESIDENT RATIO – COMPARABLE CITIES FHI #7 GENERAL GOVERNMENT
DEBT, PENSION LIABILITY & OPEB BURDEN PER
RESIDENT RATIO
Lower debts, pension liability, and other post-employment benefits (OPEB) per capita result in a smaller debt burden on taxpayers. A lower ratio indicates a stronger financial condition.
FY 17‐18
$2,290
FY 18‐19
$2,147
FY 19‐20
$3,167
FY 20‐21
$2,263 FY 21‐22
$1,728
Anaheim, $3,518
Ontario, $2,583
Glendale, $1,872
Riverside, $1,728
Burbank, $1,488
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13 • FHI # 8 Governmental Funds Coverage Ratio –Al a r g e rp o r t i o no f expenses used for debt means the City is less able to spend money on services and capital improvements.
• FHI # 9 Enterprise Funds Coverage Ratio – Availability of resources for Enterprise Funds to make bond payments.
• FHI # 10 General Government Capital Asset Value Ratio – Change in v a l u eo fc a p i t a la s s e t sw h e r ei fC i t yd o e s n ' tr e p l a c eo rr e n o v a t ei t s capital assets, value over time decreases.
• FHI # 11 Enterprise Funds Capital Asset Age Ratio –P e r c e n t a g eo f Enterprise Funds capital assets that have been depreciated.
LONG-TERM SOLVENCY- CONTINUED
RiversideCA.gov
14 5-YEAR GOVERNMENTAL FUNDS COVERAGE RATIO
City of Riverside
FY 21-22 GOVERNMENTAL FUNDS COVERAGE RATIO – COMPARABLE CITIES FHI #8 GOVERNMENTAL FUNDS COVERAGE RATIO
A city has principal and interest payments on debts. The lower the amount of these payments compared to all the other expenditures it has, the stronger its financial condition. A lower ratio indicates a stronger financial condition.
FY 17‐18
11%
FY 18‐19
14%
FY 19‐20
5%
FY 20‐21
13%
FY 21‐22
13%
Riverside, 13%
Ontario, 12%
Anaheim, 8%
Glendale, 1%
Burbank, 1%
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15 5-YEAR ENTERPRISE FUNDS COVERAGE RATIO
City of Riverside
FY 21-22 ENTERPRISE FUNDS COVERAGE RATIO – COMPARABLE CITIES FHI #9 ENTERPRISE FUNDS COVERAGE RATIO
Just like a city’s governmental services need to pay their debts (i.e., bonds) in the long-term, a city’s enterprise funds need to do so as well. The City’s Enterprise Funds include Electric, Water, Sewer, Airport, Refuse, Transportation, Public Parking, and Civic Entertainment Funds. A higher ratio indicates a stronger financial condition.
FY 17‐18
13.48 FY 18‐19
9.82 FY 19‐20
10.99 FY 20‐21
11.35 FY 21‐22
12.51 Riverside, 12.51
Anaheim, 18.17
Burbank, 44.52
Glendale, 50.12
Ontario, 50.60
RiversideCA.gov
16 5-YEAR GENERAL GOVERNMENT CAPITAL ASSET VALUE RATIO
City of Riverside
FY 21-22 GENERAL GOVERNMENT CAPITAL ASSET VALUE RATIO – COMPARABLE CITIES FHI #10 GENERAL GOVERNMENT
CAPITAL ASSET VALUE RATIO
Capital assets include land, buildings, vehicles, and public infrastructure. Most of the City’s capital assets decrease in value over time due to depreciation. A negative ratio means that the overall value of a city’s assets decreased over the year indicating some assets may need to be renovated or replaced. A higher ratio indicates a stronger financial condition.FY 17‐18 ‐4%
FY 18‐19
‐4%
FY 19‐20
0%
FY 20‐21
7%
FY 21‐22
0%
Glendale, ‐1%
Anaheim, 0%
Riverside, 0%
Burbank, 1%
Ontario, 4%
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17 FHI #11 ENTERPRISE FUNDS CAPITAL
ASSET AGE RATIO
5-YEAR ENTERPRISE FUNDS CAPITAL ASSET AGE RATIO
City of Riverside
FY 21-22 ENTERPRISE FUNDS CAPITAL ASSET AGE RATIO – COMPARABLE CITIES Depreciable capital assets include buildings, v ehicles, and public infrastructure. Assets are depreciated over their useful life as they age, and their value is reduced. A lower ratio indicates Enterprise Funds capital assets are newer and may not require as much replacement and/or maintenance costs compared to older capital assets.
FY 17‐18
33%
FY 18‐19
34%
FY 19‐20
36%
FY 20‐21
38%
FY 21‐22
39%
Burbank, 57%
Ontario, 57%
Glendale, 55%
Anaheim, 40%
Riverside, 39%
RiversideCA.gov
18 • Indicator # 12 General Fund Public Safety Costs Ratio –C o m p a r e sa n d determines the funding level of the General Fund public safety costs.
RESOURCE ALLOCATION
(For informational purposes only)
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19 INDICATOR #12 GENERAL FUND
PUBLIC SAFETY COSTS RATIO
5-YEAR GENERAL FUND PUBLIC SAFETY COSTS RATIO *
City of Riverside
FY 21-22 GENERAL FUND PUBLIC SAFETY COSTS RATIO – COMPARABLE CITIES This ratio compares the total costs of the General Fund public safety, which includes police and fire, to the total General Fund expenditures and transfers out. A higher ratio indicates more funds are dedicated to public safety.
* Includes Measure Z
FY 17‐18
61%
FY 18‐19
62%
FY 19‐20
62%
FY 20‐21
58%
FY 21‐22
60%
Anaheim, 49%
Burbank, 53%
Ontario, 57%
Riverside, 60%
Glendale, 64%
RiversideCA.gov
20 Strategic Priority No. 5 – High Performing Government Goal 5.2 Utilize technology, data, and process improvement strategies to increase efficiencies, guide decisio n making, and improve access to and delivery of financially sustainable city services.
Goal 5.3 Enhance communication and collaboration with community members to improve transparency, build public trust, and encourage shared decision making.
STRATEGIC PLAN ALIGNMENT
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21 Strategic Priority No. 5 – High Performing Government Goal 5.4 Achieve and maintain financial health by addressing gaps between revenues and expenditures and aligning resources with strategic priorities to yield the greatest impact.
Goal 5.5 Foster a culture of safety, well-being, resilience, and sustainability across the city organization.
STRATEGIC PLAN ALIGNMENT
RiversideCA.gov
22 Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
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23 RECOMMENDATIONS
That the Financial Performance and Budget Committee receive and provide input on the Financial Health Indicators.
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