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RiversideCA.gov
City CouncilMay 16, 2023FINANCIAL HEALTH INDICATORSFinance Department RiversideCA.gov2
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 residentsPURPOSE 4/25/2023
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•FHI #1 General Fund Reserve Ratio– Building up reserves which isuseful in identifying deteriorating fund balance reserves.•FHI #2 General Fund Liquidity Ratio– Ability to pay expenseswhich is useful in identifying City’s ability to pay bills on time.FINANCIAL POSITIONCAN THE CITY PAY ITS BILLS NOW? RiversideCA.gov4
5-YEAR GENERAL FUND RESERVE RATIO *City of RiversideFY 21-22 GENERAL FUND RESERVE RATIO – COMPARABLE CITIES* Includes Measure ZFHI #1 GENERAL FUND RESERVE RATIOA declining fund balance reserve can be a sign of fiscal stress. This indicator is important inidentifying a trend of a deteriorating fund balance reserves as well as how rapidly it is deteriorating.Ahigher ratiosuggests larger reserves for dealing with unexpected resource needs in the long run.FY 17-1823%FY 18-1930%FY 19-2036%FY 20-2141%FY 21-2241% Ontario, 9%Anaheim, 10%Glendale, 40%Riverside, 41%Burbank, 55% 4/25/2023
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5-YEAR GENERAL FUND LIQUIDITY RATIO *City of RiversideFY 21-22 GENERAL FUND LIQUIDITY RATIO – COMPARABLE CITIESFHI #2 GENERAL FUND LIQUIDITY RATIOA declining ratio indicates a city does not have sufficient cash available to meet its currentobligations as they come due. This indicator is important in identifying a trend of deteriorating cashas well as how rapidly it is deteriorating. Ahigher ratiosuggests a greater capacity for paying offshort-term obligations.* Includes Measure ZFY 17-182.58FY 18-193.34FY 19-203.50FY 20-213.59FY 21-224.52 Ontario, 2.14Anaheim, 2.43Riverside, 4.52Burbank, 5.54Glendale, 5.60 RiversideCA.gov6
•FHI # 3 General Government Growth in Net Position Ratio– Changein Net Assets where a growth in net position indicates City can payits expenses with its revenue and establish appropriate reserves forfuture allocation.•FHI # 4 General Government Operating Margin Ratio– City servicesare more self-sufficient through charges, fees, and grants.•FHI # 5 General Government Own Source Revenue Ratio– Relianceon tax dollars versus the City's reliance on federal and state grants.FINANCIAL PERFORMANCECAN THE CITY' S REVENUES COVER ITS EXPENSES? 4/25/2023
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5-YEAR GENERAL GOVERNMENT GROWTH IN NET POSITION RATIO City of RiversideFY 21-22 GENERAL GOVERNMENT GROWTH IN NET POSITION RATIO – COMPARABLE CITIESFHI #3 GENERAL GOVERNMENT GROWTH IN NET POSITION RATIORevenues from programs ideally should cover the expenses that are incurred for those programs,otherwise reserves may need to be used to meet the needs. Ahigher ratiosuggests that annualcosts are adequately funded, and the financial condition is improving.FY 17-18-0.3%FY 18-195.0%FY 19-20-0.7%FY 20-212.2%FY 21-2211.5% Glendale, 6.6%Burbank, 7.8%Ontario, 10.1%Riverside, 11.5%Anaheim, 22.2% RiversideCA.gov8
FY 21-22 GENERAL GOVERNMENT OPERATING MARGIN RATIO – COMPARABLE CITIES5-YEAR GENERAL GOVERNMENT OPERATING MARGIN RATIOCity of RiversideFHI #4 GENERAL GOVERNMENT OPERATING MARGIN RATIOA city charges for services and may receive grants and aid from other governments (e.g. Federaland State). Ahigher ratiosuggests basic government services are more self-sufficient throughcharges, fees, and grants and less reliant on general tax dollars to fund program expenditures.FY 17-1822%FY 18-1929%FY 19-2021%FY 20-2130%FY 21-2239% Riverside, 39%Burbank, 45%Glendale, 56%Anaheim, 65%Ontario, 69% 4/25/2023
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5-YEAR GENERAL GOVERNMENT OWN SOURCE REVENUE RATIO City of RiversideFY 21-22 GENERAL GOVERNMENT OWN SOURCE REVENUE RATIO – COMPARABLE CITIESFHI #5 GENERAL GOVERNMENTOWN SOURCE REVENUE RATIORevenues 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 governmentrevenues were supported by grants. Alower ratiosuggests that the City is not heavily reliant on grantsand more reliant on general tax dollars and charges for services.FY 17-1813%FY 18-1915%FY 19-2012%FY 20-2123%FY 21-2221% Anaheim, 37%Glendale, 29%Riverside, 21%Burbank, 20%Ontario, 19% RiversideCA.gov10
•FHI # 6 General Government Near-Term Solvency Ratio–Ability to pay obligations with annual revenues where fewernumber of years of annual revenue needed to pay Cityobligations the stronger its financial condition.•FHI # 7 General Government Debt, Pension Liability & OtherPost-Employment Benefits (OPEB) Burden per Resident–Amount of liability per resident where lower liability per capitaresults in smaller debt, pension, and OPEB burden ontaxpayers.LONG-TERM SOLVENCYCAN THE CITY PAY ITS BILLS IN THE FUTURE? 4/25/2023
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5-YEAR GENERAL GOVERNMENT NEAR-TERM SOLVENCY RATIO City of RiversideFY 21-22 GENERAL GOVERNMENT NEAR-TERM SOLVENCY RATIO – COMPARABLE CITIESFHI #6 GENERAL GOVERNMENTNEAR-TERM SOLVENCY RATIOThis ratio demonstrates a City’s ability to pay a larger portion of its debts with annual revenues. Alower ratioindicates a stronger financial condition.FY 17-182.80FY 18-192.43FY 19-203.49FY 20-212.25FY 21-221.69 Anaheim, 1.78Riverside, 1.69Glendale, 1.46Ontario, 1.16Burbank, 0.99 RiversideCA.gov12
5-YEAR GENERAL GOVERNMENT DEBT, PENSION LIABILITY & OPEB BURDEN PER RESIDENT RATIOCity of RiversideFY 21-22 GENERAL GOVERNMENT DEBT, PENSION LIABILITY & OPEB BURDEN PER RESIDENT RATIO – COMPARABLE CITIESFHI #7 GENERAL GOVERNMENTDEBT, PENSION LIABILITY & OPEB BURDEN PER RESIDENT RATIOLower debts, pension liability, and other post-employment benefits (OPEB) per capita result in asmaller debt burden on taxpayers. Alower ratioindicates a stronger financial condition.FY 17-18$2,290FY 18-19$2,147FY 19-20$3,167FY 20-21$2,263FY 21-22$1,728 Anaheim, $3,518Ontario, $2,583Glendale, $1,872Riverside, $1,728Burbank, $1,488 4/25/2023
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•FHI # 8 Governmental Funds Coverage Ratio– A larger portion ofexpenses used for debt means the City is less able to spend money onservices and capital improvements.•FHI # 9 Enterprise Funds Coverage Ratio– Availability of resources forEnterprise Funds to make bond payments.•FHI # 10 General Government Capital Asset Value Ratio– Change invalue of capital assets where if City doesn't replace or renovate itscapital assets, value over time decreases.•FHI # 11 Enterprise Funds Capital Asset Age Ratio– Percentage ofEnterprise Funds capital assets that have been depreciated.LONG-TERM SOLVENCY- CONTINUED RiversideCA.gov14
5-YEAR GOVERNMENTAL FUNDS COVERAGE RATIO City of RiversideFY 21-22 GOVERNMENTAL FUNDS COVERAGE RATIO – COMPARABLE CITIESFHI #8 GOVERNMENTAL FUNDS COVERAGE RATIOA city has principal and interest payments on debts. The lower the amount of these paymentscompared to all the other expenditures it has, the stronger its financial condition. Alower ratioindicates a stronger financial condition.FY 17-1811%FY 18-1914%FY 19-205%FY 20-2113%FY 21-2213% Riverside, 13%Ontario, 12%Anaheim, 8%Glendale, 1%Burbank, 1% 4/25/2023
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5-YEAR ENTERPRISE FUNDS COVERAGE RATIO City of RiversideFY 21-22 ENTERPRISE FUNDS COVERAGE RATIO – COMPARABLE CITIESFHI #9 ENTERPRISE FUNDS COVERAGE RATIOJust like a city’s governmental services need to pay their debts (i.e., bonds) in the long-term, a city’senterprise 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. Ahigher ratioindicates a stronger financial condition.FY 17-1813.48FY 18-199.82FY 19-2010.99FY 20-2111.35FY 21-2212.51 Riverside, 12.51Anaheim, 18.17Burbank, 44.52Glendale, 50.12Ontario, 50.60 RiversideCA.gov16
5-YEAR GENERAL GOVERNMENT CAPITAL ASSET VALUE RATIO City of RiversideFY 21-22 GENERAL GOVERNMENT CAPITAL ASSET VALUE RATIO – COMPARABLE CITIESFHI #10 GENERAL GOVERNMENTCAPITAL ASSET VALUE RATIOCapital assets include land, buildings, vehicles, and public infrastructure. Most of the City’s capitalassets decrease in value over time due to depreciation. A negative ratio means that the overallvalue of a city’s assets decreased over the year indicating some assets may need to be renovated orreplaced. Ahigher ratioindicates a stronger financial condition.FY 17-18-4%FY 18-19-4%FY 19-200%FY 20-217%FY 21-220% Glendale, -1%Anaheim, 0%Riverside, 0%Burbank, 1%Ontario, 4% 4/25/2023
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FHI #11 ENTERPRISE FUNDS CAPITAL ASSET AGE RATIO5-YEAR ENTERPRISE FUNDS CAPITAL ASSET AGE RATIO City of RiversideFY 21-22 ENTERPRISE FUNDS CAPITAL ASSET AGE RATIO – COMPARABLE CITIESDepreciable capital assets include buildings, vehicles, and public infrastructure. Assets aredepreciated over their useful life as they age, and their value is reduced. Alower ratioindicatesEnterprise Funds capital assets are newer and may not require as much replacement and/ormaintenance costs compared to older capital assets.FY 17-1833%FY 18-1934%FY 19-2036%FY 20-2138%FY 21-2239% Burbank, 57%Ontario, 57%Glendale, 55%Anaheim, 40%Riverside, 39% RiversideCA.gov18
•Indicator # 12 General Fund Public Safety Costs Ratio– Compares anddetermines the funding level of the General Fund public safety costs.RESOURCE ALLOCATION(For informational purposes only) 4/25/2023
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INDICATOR #12 GENERAL FUND PUBLIC SAFETY COSTS RATIO5-YEAR GENERAL FUND PUBLIC SAFETY COSTS RATIO *City of RiversideFY 21-22 GENERAL FUND PUBLIC SAFETY COSTS RATIO – COMPARABLE CITIESThis 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. Ahigher ratioindicates more funds arededicated to public safety.* Includes Measure ZFY 17-1861%FY 18-1962%FY 19-2062%FY 20-2158%FY 21-2260% Anaheim, 49%Burbank, 53%Ontario, 57%Riverside, 60%Glendale, 64% RiversideCA.gov20
STRATEGIC PLAN ALIGNMENT
STRATEGIC PRIORITY 5 - HIGH PERFORMING GOVERNMENTCROSS-CUTTING THREADS Equity
Innovation
Community Trust
Fiscal Responsibility
Sustainability and Resiliency
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RECOMMENDATIONSThat the City Council receive and provide input on the FinancialHealth Indicators discussed herein.