EVALUATION OF FISCAL CONDITIONS AND FINANCIAL INDICATORS
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City of Clearwater
EVALUATION OF
FISCAL CONDITIONS AND
FINANCIAL INDICATORS
September 30, 2000
Prepared by:
The City of Clearwater
Office of Management & Budget
TABLE OF CONTENTS
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Summary........................................................................................................... 3
Consumer Price Index.......................................................................................... 4
Revenues Indicators . .. . . . ... ..... . . . ......... .. . . . . .. .. . .... . . . . . ... . . ... . . . .. . .. . . .... . . .. . .... . . . . . . . . . . ... . 5
Net Operating Revenues per Capita - Indicator 1 .............................................6
Restricted Operating Revenues - Indicator 2................. . . . . . . ... . . . .. . . ... . . ........... . .. 7
Intergovernmental Revenues - Indicator 3. . . . . .... . . . . .. . . . . . . . . . . . .. . . . . . . . . ... . . . . . ... . . . . . . . . 8
Elastic Tax Revenues - Indicator 4 ................................................................ 9
One- Time Revenues - Indicator 5 ...... . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . .. . . . .. . . . . . . . . . . . . . . . . . . . .. 11
Property Tax Revenues - Indicator 6............................................................ 12
Uncollected Property Taxes - Indicator 7 ...................................................... 13
User Charge Coverage - Indicator 8............................................................. 14
Revenue Shortfalls - Indicator 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15
Expenditures Indicators...................................................................................... 16
Net Operating Expenditures per Capita - Indicator 10..................................... 17
Employees per Capita - Indicator 11............................................................ 18
Fixed Costs - Indicator 12............... ...................................................... ..... 19
Fringe Benefits - Indicator 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20
Operating Position Indicators............................................................................... 21
General Fund Operating Surplus - Indicator 14............................................... 22
Enterprise Funds - Indicator 15 ................................................................... 23
Undesignated Fund Balance - Indicator 16 ..................................................... 28
Liquidity - Indicator 17 .............................................................................. 29
Debt Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 30
Current Liabilities - Indicator 18 ................................................................ 31
Long-Term Debt - Indicator 19................................................................... 32
Debt Service - Indicator 20 ........................................................................ 33
Overlapping Debt - Indicator 21 ................................................................. 34
Unfunded Liability Indicators .............................................................................. 35
Unfunded Pension Liability - Indicator 22..................................................... 36
Pension Assets - Indicator 23.................... . . . . . . .. . . . . .. . . . . . . . . . . . ... . . .. . . . . . . . .. . ...... .. 37
Accumulated Employee Leave - Indicator 24 .................................................38
i
TABLE OF CONTENTS
Capital Plant Indicators..................................................................... . . . . . . . . . . . . . . . .. 39
Maintenance Effort - Indicator 25 ............................................................... 40
Capital Outlay - Indicator 26 ..................................................................... 52
Depreciation Expense - Indicator 27 ............................................................ 53
Community Needs and Resources Indicators........................................................... 54
Population - Indicator 28.............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 55
Median Age - Indicator 29 .. .... .. ..... .. .. . . . . . . . . . . . ... . . . . . . .. . . . . . . . . . . . . . . . . . . . .. .. . . . . . . . . ... 56
Personal Income per Capita - Indicator 30 .................................................... 57
Poverty Households - Indicator 31. ...... ... . . . . . . . . .... . . . . .... . .. . . ... . . .. .. . . . . .... . . .... ..... 58
Property Value - Indicator 32..................................................................... 59
Residential Development - Indicator 33 ........................................................ 60
Employment Base - Indicator 34 ................................................................. 62
Business Activity - Indicator 35.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 63
Selected Bibliography................................................................... ~ . . . . . . . . . . . . . . . . . . . .. 64
Index... ...... . . . . ... .... . . . . ........... . . . . . . .. ... . . . . .. .... .. . . . . . . . . . .... . . . .. .. . . . . . . . ... . . . . ... . . . . . ..... . . . .. 65
ii
INTRODUCTION
This document provides a look at the fInancial, economic and demographic trends of the City of Clearwater.
The purpose of this report is to provide a method for monitoring the City's fmancial condition. By fmancial
condition we are referring to both the City's ability to generate sufficient revenues to satisfy the
expenditures within a given fIscal year, and also its ability to meet long-term obligations. This report is for
the use of City officials as a tool to help:
. better understand the City's fmancial condition;
. identify existing and potential fmancial concerns;
. make informed decisions and take corrective actions.
The evaluation of the City of Clearwater's fIscal condition was accomplished through the use of the
Financial Trend Monitoring System as outlined in the International City/County Management Association's
(ICMA) publication, Evaluating Financial Condition: A Handbook for Local Government. In this
handbook, the ICMA has developed 36 fmancial indicators that are considered appropriate for measuring
the fmancial condition of local governments. The City's Office of Management and Budget has evaluated
all of these indicators for which sufficient data is available for inclusion in this document. Together these
indicators provide a broad and objective view of the City's overall condition. This analysis will not provide
solutions to problems, but it will highlight areas of fmancial concern.
This report draws heavily from the defmitions, descriptions and benchmarks contained in the ICMA
handbook. In addition to identifying many factors that affect the City's fmancial condition, this report
portrays these factors in a manner that allows them to be measured and analyzed. The following diagram
reflects the 12 factors used by the ICMA.
FINANCIAL CONDITION FACTORS
Environmental Factors
Organizational Factors
Community
Needs &
Resources
External
Economic
Conditions
Policiesl
Management
Practices
Intergovernmental
Constraints
Natural Disasters
& Emergencies
Political Culture
Financial Factors
Revenues
Expenditures
Operating
Position
Debt Structure
Contingent
Liabilities
Condition of
Capital Plant
INTRODUCTION
All of these factors are closely related and should be given careful consideration when evaluating an
organization's fmancial condition. All of the Financial Factors along with the Community Needs and
Resources portion of the Environmental Factors will be analyzed in this report through the use of specific
trend indicators. The remaining Environmental Factors and the Organizational Factors, however, cannot be
quantified and therefore will not be addressed
Many of the defmitions relating to the components of these indicators are subject to interpretation and
professional judgment. In some instances, ICMA's original indicator has been modified from its original
format in order to make it compatible with the City's record keeping and fmancial reporting. The analysis
draws on the expertise of many professionals throughout the City of Clearwater. Besides the Office of
Management and Budget, these include the Finance Department and the controllers of the various enterprise
and utility operations.
Source
This management tool is created from a number of sources. The bulk of the information comes from the
City's Comprehensive Annual Financial Report (CAFR) for the years 1996 - 1999 and its supporting
schedules and workpapers. Fiscal Year 2000 data comes from the CAFR Draft for that year, since the fmal
audited report was not yet available when this document was prepared. Budget and employee information
comes from the Annual Operating and Capital Budget for fiscal years 1996 - 2000. Some of the more
detailed information is provided by reports created on the City's fmancial system. Any other sources of
information are noted on the indicator pages when applicable. A list of the sources used can be found in the
Bibliography at the end of this document.
Format
This fiscal indicators document is organized into seven factors: Revenues, Expenditures, Operating
Position, Debt, Unfunded Liabilities, Capital Plant, and Community Needs and Resources. Each one has a
summary preceding the section and then each indicator related to the factor is analyzed. For each one the
reader will fmd Clearwater's trend, a warning trend describing what condition to be concerned about, the
formula used to compute the indicator, a graph of the five most recent years data, a table listing the data
used, a background description of the indicator and its significance, and an analysis of the City of
Clearwater's results. The reader can get a quick overview of the City's condition by reading only the
section summaries. Unless otherwise noted, the indicators utilized in this report will focus on the City's five
most recent years of data.
2
SlJMl\.1ARY
The overall finandal condition of the City of Clearwater is strong, with only a few areas of concern.
Revenues for the most part have been increasing steadily and more quickly than the population. The revenue mix is changing
and the portion of City revenue that is beyond the City's control is increasing. The City is showing an increased reliance on
Restricted and One-Time Revenues (such as Penny for Pinellas and grants), and Intergovernmental Revenues (from other
government entities). Charges and fees for services are providing a reduced percentage of the cost of providing the services
and putting an increased burden on the City's unrestricted revenues.
Three of the four Expenditure indicators reflect a positive trend. The most positive expense indicator is a decrease in fIxed
costs that allows more flexibility for city management in the use of the City's unrestricted revenues. Personnel costs are one
of the City's largest expenditures. The number of employees has been nearly constant on a per capita basis, and the City's
percentage of fringe benefIts to its salaries and wages has also remained relatively stable. These are both positive indicators.
However, the City's net operating expenditures per capita have been increasing, a sign that the cost of delivering services is
increasing on a per capita basis.
Most of the City's enterprise funds have maintained consistent operating surpluses during the fIve years analyzed. They
appear to be fmancially stable and sufficiently profItable. Only the Harborview Center Fund and the Stormwater fund have
repeated defIcits. Annual 4.3 % rate increases should help the position of the Stormwater Fund in the near future. Although
the Harborview Fund's annual defIcit is decreasing, it continues to be signifIcant and the fund is not expected to show an
operating surplus for several years, if ever.
The City's annual General Fund Operating surplus has decreased and is primarily an indication of more accurate revenue
projections combined with the City's commitment to providing the highest possible level of service. The accompanying
decrease in the undesignated fund balance, which is the City's General Fund Reserve, is a direct result in a change in city
policy, which reduced it from 10% to 8 % of operating expenditures, and needs to continue to be monitored closely.
When it comes to paying its bills, the City exceeds all industry benchmarks for the ratio of cash to current liabilities, and has
not experienced any cash flow problems in the fIve years analyzed. Debt service payments are well below the acceptable level
of 10% of operating revenues and indicate the City has no reason for concern in this area. In fact, all debt indicators are
extremely positive.
The City of Clearwater' s pension plans reflect assets that are increasing in relation to their annual benefIt payments. The
unfunded liability of the employees pension plan increased sharply in 2000, but there is no reason to be concerned, since the
increase is the direct result of changes in the plan's benefIts, and no increase in the City's current annual contribution of 7%
of payroll is anticipated. The only area of concern regarding unfunded liabilities revealed by this document is for accumulated
employee leave. This has increased over the fIve years analyzed, but is showing signs of leveling off in the last two years. It
is an area that needs to be monitored closely to determine whether recent changes in the rate at which employees can accrue
leave and in the total amount they may retain are succeeding in reducing this City obligation.
Capital Plant maintenance effort reveals a couple of areas of reduced maintenance over the last fIve years. These include
streets, and storm sewers. Although the marina trend appears negative on the surface, the maintenance effort has actually been
constant over the fIve years analyzed. Larger than normal infrastructure improvements were completed in 1996 and 1997.
The capital outlay of the General and Special Revenue funds exclusive of capital improvement projects has been fairly constant.
This indicates that equipment for those funds is being replaced at a fairly constant rate over the fIve-year period, a positive
trend.
The City of Clearwater' s community needs and resources indicators reflect primarily positive trends. Demographic trends
reflect positive increases in the areas of population growth and personal income per capita, although poverty households appear
to be on the increase. The economic indicators for employment base, business activity, residential development and property
values are all positive.
3
CONSUMER PRICE INDEX
Consumer Price Index and Constant Dollars
Many of the fiscal indicators in this document use the Consumer Price Index (CPI) as a means of standardizing
dollar amounts over different years. The CPI is a measure of inflation. This calculation removes the inflationary
factor so that the true growth or decline of revenues and expenditures may be determined. It tracks the prices of
goods and services purchased by the average urban wage earner. Among the items included are food, housing,
clothing, transportation, health and recreation. In this document, the CPI is measured using the Bureau of Labor
Statistics table for All Urban Consumers using 1983 as the base year. This table has then been modified to use
1996 as the base year. The following table and graph show the 1983 based consumer price index and the
modified 1996 based consumer price index.
If consumers in 2000 spend more actual (real) dollars to buy the same goods as in 1996, the CPI rises by the
percentage of increase in price. In the same way the CPI declines when consumer prices decrease.. The 2000
CPI reflects an inflation rate of 9.3%. The same goods that cost $100.00 in 1996, cost $109.30 in 2000.
The term for real dollar data that has been adjusted for inflation using the Consumer Price Index is constant
dollar. This term is used throughout this document.
Consumer Price Index
160
80
140
120
100
40
20
FY95
FY96
FY97
FY98
FY99
FYOO
1~1983base _1996 base I
Consumer Price Index (CPI) FY95 FY96 FY97 FY98 FY99 FYOO
1983 base 152.4 156.9 160.5 163.0 166.6 171.5
1996 base 97.13 100.0 102.3 103.9 106.2 109.3
Note
The 2000 CPI is computed as the average of the first nine months of the year, which is the most current
information available at the time this document was created.
4
REVENUE INDICATORS
Revenues generated by a local government determine its capacity to provide services for its residents.
There are a number of significant factors, which impact revenues. These include but are not limited to
economic conditions, demographic composition, administration and population growth.
Under ideal conditions, revenues should be growing at a rate equal to or faster than the combined effects of
expenditures and inflation. Revenues should be sufficiently flexible (free from spending restrictions) to
allow adjustments to changing conditions. Revenues should also have a healthy balance between elastic and
inelastic sources. Elastic revenues, such as sales and property taxes, are highly responsive to changes in the
economy, and tend to increase with inflation or a strong economy, but decrease when the economic base
shrinks. Inelastic revenues, such as license fees and user charges, are relatively unresponsive to economic
changes, and require a change in fees to change revenue yield. These revenues usually lag behind economic
growth and inflation because local government bodies are reluctant to increase the rates each year.
However, during an economic downturn, a high percentage of non-elastic revenues becomes an advantage,
and softens the effect of the slower economy.
A local government should not become overly reliant on anyone specific revenue source. That could
produce hardships if it was reduced or completely eliminated (i.e., federal grants or discretionary state aid.
User fees and services charges should be reviewed regularly, either independently or in-house, to determine
the feasibility of their structure and whether or not they cover the associated costs of providing their related
services.
An analysis of the local government's revenues may identify:
. Deteriorated revenue bases;
. Management policies that adversely affect revenue production;
. An over dependence on one particular revenue source;
. Changing tax burdens on various segments of the population;
. Ineffective cost controls or poor revenue projections;
. Inefficient revenue collection practices;
. User fees that are not covering the cost of services.
City of Clearwater Results
This document looks at six revenue indicators. The results are mixed, and reveal several areas of concern.
Even though the City's overall revenues per capita has been increasing, and revenue estimating has been
very accurate, the changes in type of revenue reflect reduced spending flexibility for the City. Restricted
revenues and one-time revenues are becoming an increasing percent of net operating revenues. The City is
also becoming more dependent on revenue from other entities, such as state and federal governments. This
means the portion of City revenue that is beyond the City's control is increasing. Another area of concern is
user charge coverage. Charges and fees for services are providing a reduced percentage of the cost of
providing the services, thus putting an increased burden on the City's unrestricted revenues.
5
NET OPERATING REVENUES PER CAPITA
INDICATOR 1
Clearwater's Trend: Very Positive
Net Operating Revenues per Capita
Formula:
Net operating revenues (constant dollars)
Population
$780
$760
$740
$720
$700
$680
$660
$640
$620
$600
$580
Warning Trend:
Decreasing net operating revenues per capita
(constant dollars)
FY 96 FY 97 FY 98 FY 99 FY 00
_ Net operating revenues per capita (real dollars)
c:::J Net operating revenue per capita (constant 1996 dollars)
-5 year trend inconstant dollars
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
lNet operating revenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
Current population 101,867 102,472 102,874 104,281 104,454
!Net operating revenues per capita (real dollars) $641 $666 $689 $699 $753
Consumer price index 100.0 102.3 103.9 106.2 109.3
lNet operating revenues (constant dollars) 65,336,000 66,678,397 68,201,155 68,653,484 71,927,722
lNet operating revenue per capita (constant 1996 dollars) $641 $651 $663 $658 $689
Backe:round
Examining per capita revenues shows changes in revenues relative to changes in population size and rate of inflation. As
population increases, it might be expected that revenues and the need for services would increase proportionately, and
therefore that the level of per capita revenues would remain constant. If per capita revenues are decreasing, the government
may be unable to maintain existing service levels unless it fmds new revenue sources or ways to save money. This reasoning
assumes that the cost of services is directly related to population size.
Analvsis
This indicator looks at the City's net operating revenues for the General Fund and the Special Revenues Funds. The City's
net operating revenues per capita (constant dollars) has increased slowly over the five year measurement period. The fiscal
year 2000 increase can be attributed mainly to a 7.8% increase in the property tax millage rate from 5.1158 to 5.5032. The
City is also realizing increases in taxable value that average 1 % more than the inflation rate, which contributes to the increase
in revenues per capita. Utility taxes revenues for telecommunications have also been increasing over the period. Since the
City is committed to maintaining a high level of service, a trend of stable or slowly increasing net operating revenues per
capita is necessary. The City's trend is very positive.
6
RESTRICTED OPERATING REVENUES
INDICATOR 2
Clearwater's Trend: Marginal
Restricted Operating Revenues
as percent of net operating revenues
Formula:
Restricted operating revenues
Net Operating Revenues
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Warning Trend:
Increasing amount of restricted operating
revenues as a percentage of net operating revenues
FY96
FY97
FY98
FY99
FYOO
c::::J Restricted operating revenues as a percentage of net
operating revenues
-S-year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Restricted operating revenues 19,406,000 22,317,000 21,904,000 24,843,000 24,995,000
Net operating revenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
Restricted operating revenues as a percentage of net
operating revenues 29.7% 32.7% 30.9% 34.1% 33.3%
Backe:round
Restricted operating revenues are those revenues that are legally eannarked for a specific purpose, as may be required by
federal or state law, grant requirements or bond covenants. For example, Florida Statutes require that the proceeds of the
local option gas tax be used solely for transportation related expenditures. As the percentage of restricted operating
revenue increases, revenue spending options become lost. Increases in restricted operating revenues may indicate a City's
over reliance on external sources which may not always be available. The loss of these revenues may make it difficult to
maintain acceptable levels of service. There is no benchmark level of restricted operating revenues that is considered
excessive. Each local government must decide that for itself.
Analvsis
The City's restricted operating revenues are comprised of Community Development Block Grant funding, State Revenue
Sharing restricted to transportation, the Pine lIas Library Cooperative, reimbursement from the Community
Redevelopment Agency, Fire and Emergency Medical Services taxes received from Pinellas County, funding of debt
service obligations, and Special Revenue Funds which include Penny for Pine lIas, road millage, impact fees and
donations.
The City's restricted operating revenues as a percentage of net operating revenues has been slowly increasing over the
period analyzed, and account for about one third of net operating revenues. This trend is marginal. The City has
aggressively pursued various grants to help fund special initiatives such as additional police officers and construction
projects. In this way the City has increased services and added infrastructure without having to tie up general use funding
such as property tax revenues. This shows that the City is somewhat reliant on external revenue sources, thus increasing
the consequences of their potential reduction or elimination. The City has very little flexibility in choosing where and
how to spend such revenue sources, and must be careful not to become overly reliant on such sources.
7
INTERGOVERNMENTAL REVENUES
INDICATOR 3
Intergovernmental Revenues
Clearwater's Trend: Marginal
27.5%
27.0%
26.5%
26.0%
25.5%
25.0%
24.5%
24.0%
23.5%
23.0%
22.5%
FY96 FY97
Warning Trend:
Increasing amount of intergovernmental revenues as a
percentage of gross operating revenues
Formula:
Intergovernmental operating revenues
Gross Operating Revenues
FY98
FY99
FYOO
E:::=:::Ilntergovemmental operating revenues as a percentage of gross operating
revenues
-5 year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Intergovernmental operating revenues 20,455,000 23,353,000 23,900,000 26,030,000 25,573,000
Gross operating revenues 84,706,000 93,413,000 94,552,000 96,911,000 101,921,000
Intergovernmental operating revenues as a percentage
of gross operating revenues 24.1% 25.0% 25.3% 26.9% 25.1%
Backl!:round
Intergovernmental revenues (revenues received from another governmental entity), can be dangerous to a City's [mancial
condition if the City relies too heavily on such sources. In recent years federal and state governments have withdrawn or
reduced funding to local governments as a method of dealing with their own budgetary struggles. While all local
governments have felt the pain of federal and state cutbacks, local governments with budgets largely supported by
intergovernmental revenues have been particularly hard hit. Analysis of intergovernmental revenues primarily informs a
local government as to its vulnerability to reductions of such revenues, and helps determine whether the local government
is controlling its use of the external revenue, or whether these revenues are controlling local policies.
Analvsis
The City's percentage of intergovernmental revenues to gross operating revenues for the General and Special Revenue
Funds has shown a slight increase over the past five years. This needs to be monitored so that the City does not become
overly reliant on outside revenue sources. Aggressive pursuit of outside grants in recent years has enabled the City to
invest in new infrastructure and services without reducing the level of other services. The large increase in
intergovernmental revenues in fiscal year 1999 is primarily due to over a million dollars of new grants. Another factor is
a $380,000 increase in local option gas tax revenues. However, fiscal year 2000 reflects a 1.2 million dollar decrease in
grant revenues which is partially offset by increases in sales tax, state revenue sharing, and local option gas tax revenues.
In the near future, the City's intergovernmental revenues are expected to remain relatively constant. However, the City
must continue to examine the portion of intergovernmental revenues (Cigarette Tax, Revenue Sharing, Beverage License
Tax, and Sales Tax/Locall/2 Cent) that are unrestricted and used to fund on-going operations. If this portion of
intergovernmental revenues disappeared the City would either have to find more revenue from other sources or reduce
services.
8
ELASTIC TAX REVENUES
INDICATOR 4
Clearwater's Trend: Positive
Elastic Tax Revenue vs. Net Operating
Revenues
10.0%
50.0%
Warning Trend:
40.0%
30.0%
Decreasing amount of elastic operating revenues
as a percentage of net operating revenues 20.0%
Formula:
Elastic Operating Revenues
Net Operating Revenues
0.0%
FY96
FY97
FY98
FY99
FYOO
.:::::::=I Elastic operating revenues as a percentage of net operating revenues
-5-year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Elastic operating revenues 26,276,000 27,304,000 28,319,000 29,662,000 32,848,000
lNet operating revenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
Elastic operating revenues as a percentage of net
operating revenues 40.2% 40.0% 40.0% 40.7% 41.8%
Backl!round
Elastic revenues are those revenues which are highly responsive to both changes in the economic base and
inflation. As the economic base expands or inflation goes up, elastic revenues will rise in roughly the same
proportion and vice versa. A good example is sales tax revenues, which will increase during an economic boom
and decline during an economic recession, even though the tax rate never changes. Inelastic revenues from sources
such as user and license fees are relatively unresponsive to the economic base and inflation, and will normally
experience significant changes only if the City changes its fees.
A balance between elastic and non-elastic revenues mitigates the effects of economic growth or decline. During
inflation, it is desirable to have a high percentage of elastic revenues because inflation pushes up revenue yield,
keeping pace with the higher prices the government must pay. If the percentage of elastic revenues declines during
inflation, the government becomes more vulnerable because inflation pushes up the price of services but not the
yields of revenues.
The reverse is also true. A low percentage of elastic revenues is desirable in times of deflation, but significant
deflation has seldom occurred in recent years. During a recession, a high percentage of non-elastic revenues
becomes an advantage. This insulates the tax base to some degree from the reduced yield that can occur during a
recession.
Analvsis
Elastic revenues for the City of Clearwater' General and Special Revenue Funds include sales taxes, property taxes
(ad valorem) and building permit revenues. Both the appraised value of property and the amount of new
construction are highly responsive to economic conditions.
9
ELASTIC TAX REVENUES
INDICATOR 4
The percentage of the City's elastic revenues to its net operating revenues for the General and Special Revenue
Funds has increased slightly over the past five years. This trend is considered positive because it indicates that the
City is slowly increasing the proportion of elastic revenues. If we assume that inflation almost always exists to some
degree, it would be in the City's best interest to have a higher percentage of elastic revenues. During inflationary
periods, these revenues will be pushed higher and keep pace with the rising costs that the City will incur in
providing services. The City needs to look at ways to increase the proportion of elastic revenues in order to reduce
the impact of inflation on the City's resources.
10
ONE-TIME REVENUES
INDICATOR 5
Clearwater's Trend: Marginal
One-Time Revenues
Formula:
One-time Operating Revenues
Net Operating Revenues
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
FY96
Warning Trend:
Increasing use of one-time operating revenues as a
percentage of net operating revenues
FY97
FY98
FY99
FYOO
I:::=:J One-time operating revenues as a percentage of net operating revenues
-5 Year Trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
One-time operating revenues 2,480,000 4,448,000 3,831,000 5,484,000 3,557,000
[Net operating revenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
One-time operating revenues as a percentage of
net operating revenues 3.8% 6.5% 5.4% 7.5% 4.5%
Backl!round
A one-time revenue is one that cannot reasonably be expected to continue, such as a single -purpose federal grant, an
interfund transfer, or use of a reserve. (Reserves are technically not considered revenues, nor are some kinds of
interfund transfers). If a local government continuously uses one-time revenues to balance the annual budget, it can
indicate that the revenue base is not strong enough to support current service levels. It can also mean that a local
government is incurring operating deficits and would have little room to maneuver if there were a downturn in
revenues. Increasing use of one-time revenues increases the probability that the government will have to make
cutbacks if such revenues cease to be available.
Analvsis
Although the City's one-time operating revenues as a percentage of net operating revenues for the General and Special
Revenue Funds has been increasing over the last five years, it has remained relatively low. Another positive sign is
that the City has a reserve fund to help it weather unexpected [mancial problems, such as natural disasters or a surge in
inflation.
11
PROPERTY TAX REVENUES
INDICATOR 6
Clearwater's Trend: Positive
Property Tax Revenues
30,000,000
15,000,000
Warning Trend:
Decline in property tax revenues (constant
dollars)
25,000,000
20,000,000
10,000,000
Formula:
ProDertv Tax Revenues
Consumer Price Index
5,000,000
o
FY96
FY97
FY98
FY99
FYOO
_ Property tax revenues
-5 Year Trend (constant dollars)
t:::::I Constant 1996 dollars
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Property tax revenues 21,749,000 22,362,000 22,987,000 24,081,000 26,983,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars 21,749,000 21,859,238 22,124,158 22,675,141 24,687,100
Backe:round
Property taxes are an extremely important source of revenue as they make up the largest revenue source for the City's
General and Special Revenue Funds. A decline in this revenue source could have a number of causes. It may reflect
an overall decline in the property value resulting from an aging community or decline in the number of households. It
could result from unintentional defaults on property taxes by property owners. Itmay result from the inaccurate
assessment or appraisal of real property. Finally, it could result from property owners realizing that the penalties
imposed for late payment are less than short-term interest rates, thus providing an inexpensive way to borrow money,
Analvsis
The City's property tax revenues have been increasing over the last five years, a positive trend. The economic
redevelopment efforts of the City are beginning to be reflected in increases in taxable values that have been averaging
1% more than the rate of inflation. These values are expected to increase even more in the next few years as
properties currently being redeveloped are completed. In addition, a 7.8% increase in the property tax millage rate in
fiscal year 2000 (the first increase since 1990) has contributed to increased revenues.
12
UNCOLLECTED PROPERTY TAXES
INDICATOR 7
Clearwater's Trend: Very Positive
Uncollected Property Taxes
Formula:
Uncollected orooertv tax
Property tax levy
0.7%
0.6%
0.5%
0.4%
0.3%
0.2%
0.1%
0.0%
Warning Trend:
Increasing amount of uncollected property taxes as
a percentage of property tax levy
FY96 FY97 FY98 FY99 FYOO
Fiscal Year
c::::JUncollected property taxes as a percentage of property tax levy.
-5-year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
rrotal property tax levy 21,762,000 22,410,000 23,008,000 23,952,000 26,998,000
rrotal collections (includes delinquent collections) 21,749,000 22,362,000 22,987,000 24,081,000 26,983,000
Gross current collections · 21,675,000 22,282,000 22,857,000 23,854,000 26,876,000
!Uncollected property taxes 87,000 128,000 151,000 98,000 122,000
IUncollected property taxes as a percentage of
Iorooertv tax levy. 0.4% 0.6% 0.7% 0.4% 0.5%
· Equals actual current collections plus discounts
Backe:round
Every year, some property owners are unable to pay their property taxes. Credit rating firms assume that a local government
normally will be unable to collect from 2 to 3 percent of its property taxes within the year that the taxes are due. If
uncollected property taxes rise to more than 5 to 8 percent, rating firms consider it a negative factor because it signals
potential instability in the property tax base. An increase in the rate of delinquency for two consecutive years is also
considered a negative factor because it may indicate an overall decline in the local government's economic health. Also, as
uncollected property taxes increase, liquidity is decreased and there is less cash on hand to pay bills.
Analvsis
The City's uncollected property taxes have remained extremely low, less than 1 %, for each of the years analyzed. The
slight increases in uncollected taxes that occurred in fiscal years 1997 and 1998 were reversed in fiscal years 1999 and
2000. This is a very positive trend.
13
USER CHARGE COVERAGE
INDICATOR 8
Clearwater's Trend: Negative
Warning Trend:
Decreasing revenues from user charges as a
percentage of total expenditures for related
services
Formula:
Revenues from user charges
Expenditures for related services
User Charge Coverage
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
FY96 FY97 FY98 FY99 FYOO
c:::J Revenues from user charges as a percentage of total
expenditures for related services
-5-year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Revenues from user charges 3,479,000 3,994,000 4,099,000 4,254,000 4,759,000
Expenditures for services for which there is a fee
or user chame 5,951,000 6,671,000 7,138,000 8,334,000 8,604,000
!Revenues from user charges as a percentage of
total expenditures for related services 58.5% 59.9% 57.4% 51.0% 55.3%
Backe:round
The term user charge coverage refers to whether fees and charges cover the entire cost of providing a service.
This indicator focuses only on a few General Fund programs: Parks & Recreation Department's Recreation
Programming, Planning & Development Services exclusive of Housing and Neighborhood Services, the Sailing
Center and Pier 60. As coverage declines, the burden on other revenues to support the services increases.
Analvsis
The City's user charge coverage trend is slightly negative for the five years analyzed. This is an issue being
addressed. Rate structures for many planning and development services were amended in Fiscal Year 2000, and
rates for many recreation services are being re-structured in Fiscal Year 2001. The fiscal year 2000 coverage
rate indicates that user charge coverage is on the rise.
14
REVENUE SURPLUS/SHORTFALLS
INDICATOR 9
Clearwater's Trend: Positive
Revenue Surplus (Shortfall)
Formula:
Revenue Surolus ( Shortfall)
Net Operating Revenues
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
Warning Trend:
Increase in revenue shortfalls as a percentage of net
operating revenues
FY96
FY97
FY98
FY99
FYOO
c:::J Revenue surplus (shortfalls) as a percentage of
actual net op'erating revenues
- 5-year trena
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
~ctualnetoperatingrevenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
!Budgeted net operating revenues 64,566,000 67,710,000 70,656,000 73,234,000 78,931,000
Revenue surolus-ishortfalls) * 770,000 502,000 205,000 -324,000 -314,000
~evenue surplus (shortfalls) as a percentage of actual
net operating revenues 1.18% 0.74% 0.29% -0.44 % -0.40%
* positive number denotes a surplus
negative number denotes a shortfall
Backl!round
This indicator examines the difference between revenue estimates and revenues actually received. Major
discrepancies that continue year after year can indicate a declining economy, inefficient collection procedures or
inaccurate estimating techniques. Discrepancies may also indicate that high revenue estimates are being made to
accommodate political pressures.
Analvsis
The City has had revenue shortfalls for the General and Special Revenue Funds for two of the five years being
analyzed. Historically, the City of Clearwater has used conservative revenue estimates to assure a positive rather than
a negative difference. Fiscal years 1999 and 2000 reflect the result of the use of more aggressive revenue estimates.
The difference between budgeted and actual revenues is very narrow, less than 2% each year, indicating that the
City's ability to estimate its revenues is very accurate. Although the revenues collected were slightly less than the
amounts budgeted in the last two fiscal years, they were sufficient to maintain an operating surplus every year except
fiscal year 1999, which had a very small shortage (see Indicator 14 on page 22, General Fund Operating Surplus).
15
EXPENDITURE INDICATORS
Expenditures are one measure of the local government's service output. As the amount of services that a
government provides increases, so will the government's costs. This cost factor does not take into
consideration the effectiveness or efficiency of the services.
It is imperative to ensure that the costs that are being incurred do not exceed the revenues that are being
generated. Although the City of Clearwater, like most local governments is required to have a balanced
budget, it is important to identify expenditures that may be growing too rapidly or uncontrollably. It is
possible to balance the budget in ways that create long-run imbalances. If left unchecked, long-term
expenditures and postponed obligations could exceed projected revenues, creating deficit spending. Local
governments will commonly deal with this dilemma by issuing bonds, using reserves, and/or deferring
capital maintenance programs. Although these actions will produce a balanced budget in the current fiscal
year, allowing long-term deficits to develop is risky. Windfall revenue surges from inflation or a strong
economy do not always occur when needed.
A second important issue in analyzing expenditures is to assess the local government's flexibility in
adjusting its service levels as economic and demographic changes occur. In an ideal situation, expenditures
would grow at a slower or equal rate to that of revenues, and the government would have a great deal of
flexibility in adjusting spending. Certain fixed costs such as debt service, expenditures mandated by higher
governments, grant requirements and pension benefits severely restrict the local government's desired
flexibility level.
An analysis of the local government's expenditures may help identify:
. Expenditures which are growing at a faster rate than revenues;
. Ineffective budgetary controls;
. A decline in personnel productivity;
. Growing program requirements that will increase future liabilities;
. Increases in fixed costs.
City of Clearwater Results
This document looks at four expenditure indicators. All but one, Net Operating Expenditures per Capita
reflect a positive trend. Fixed costs as a percentage of net operating expenditures are actually decreasing
over the five-year period analyzed. Both the number of City of Clearwater employees per 1,000 residents,
and fringe benefits as a percentage of employee salaries and wages have been holding steady. The effect of
the addition of more City services over the last five years can be seen in the steady increase of expenditures
per capita.
16
NET OPERATING EXPENDITURES PER CAPITA
INDICATOR 10
Net Operating Expenditures per Capita
Clearwater's Trend: Negative
Formula:
Net Operating Exoenditures (Constant Dollars)
Population
$600
$800
Warning Trend:
Increasing net operating expenditures per capita
(constant dollars)
$700
$500
FY96
FY97
FY98
Fygg
FYoo
_Net Operating Expenditures per capita
t:::::JNet Operating Expenditures per capita (constant doltars)
-5 Year Trend (constant dollars)
Fiscal Year FY96 FY97 FY98 FY99 FYOO
et Operating Exoenditures 66,122,000 72,719,000 74,765,000 78,305,000 79,869,000
urrent oooulation 101,867 102,472 102,874 104,281 104,454
et Operating Exoenditures per capita $649 $710 $727 $751 $765
Consumer price index 100.0 102.3 103.9 106.2 109.3
lNet Operating Expenditures per capita (constant
dollars) $649 $694 $699 $707 S70~
Backe:round
Net operating expenditures per capita reflect changes in the City's expenditures for the General and Special Revenue Funds
according to changes in its population. An increase in this ratio may indicate that the costs of providing City services is
growing faster than its ability to pay for them. If inflation and additional services cannot provide a valid explanation for
expenditure increases, then the City could be suffering from a decline in productivity.
Analvsis
This indicator looks at the expenditures of the General and Special Revenue Funds. The City's real net operating expenditures
per capita are 18% higher in FY 2000 than in FY 1996, which translates to 8% higher in constant dollars. This is a result of an
increase in the number of employees and additional City services over the five years analyzed. Pubic Safety employees
increased by 23.8 full time equivalent positions in the Police and Fire Departments. Planning and Development Services and
Economic Development increased by 28 positions. Over the same period of time, the net operating revenues per capita (see
indicator 1) have also been increasing, but at a slower rate of 14% over the five years. The rate of expenditure increase needs
to be monitored closely, and not be allowed to exceed the City's ability to generate revenue. This trend of increasing net
operating expenditures per capita is negative.
17
EMPLOYEES PER CAPITA
INDICATOR 11
Clearwater's Trend: Positive
Municipal Employees per 1000 of
Population
Formula:
Number of General Fund municipal employees
Population! I 000
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Warning Trend:
Increasing number of General Fund municipal employees
per 1000 population
FY96
FY97
FY98
FY99
FYOO
Fiscal year: FY96 FY97 FY98 FY99 FYOO
Number of General Fund municipal employees 1,070.6 1,092.3 1,099.6 1,131.4 1,148.3
Number of Grant funded municipal employees 11.0 25.0 19.0 18.0 10.0
Total General and Special Revenue Fund employees 1,081.6 1,117.3 1,118.6 1,149.4 1,158.3
Current population 101,867 102,472 102,874 104,281 104,454
Employees per 1000 of population 10.6 10.9 10.9 11.0 11]
Backe:round
Personnel costs are one of the City's largest expenditures. Plotting employees per capita on a graph provides a good overall
monitoring tool of expenditures. An increase in employees per capita could indicate expenditures rising faster than revenues,
the City becoming more labor intensive or a decrease in employee productivity.
Analvsis
Over the past five years, the number of the City's General and Special Revenue Fund employees per 1,000 of population has
remained at approximately eleven employees per 1,000 residents. This has been a result of the City's dedication to managing
limited resources while providing quality services and a high level of public safety. Additional police officers and building
inspectors initially funded by grants are now being supported by General Fund revenues. Additional facilities have been added,
such as Lake Chautuaqua Park and the Beach Aquatics Center.
The relative proportion of employees in the various expenditure categories has remained consistent except for Community
Development (Planning & Development Services and Economic Development), which has been receiving emphasis while the
City has been reducing the expenses of General Government (City Manager, Finance, Budget, City Clerk, Legal, Audit, Public
Communications). See the following table which shows the relative proportion of expenditure categories over the past five
fiscal years.
Budgeted General Fund Employees FY96 % FY97 FY98 FY99 FYOO %
General Government 102.3 9.6% 96.5 100.0 104.9 98.0 8.5%
leisure 276.5 25.8% 285.2 283.8 285.0 289.8 25.2%
Fire 170.0 15.9% 170.0 170.0 171.5 180.0 15.7%
Police 386.4 36.1% 393.6 393.8 411.0 411.0 35.8%
Public Works 92.4 8.6% 93.0 98.0 98.0 98.0 8.5%
Community Development 43.0 4.0% 54.0 54.0 61.0 71.0 6.2%
Total 1,070.6 100.0% 1,092.3 1,099.6 1,131.4 1,147.8 100.0%
18
FIXED COSTS
INDICATOR 12
Fixed Costs
Clearwater's Trend: Positive
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Warning Trend:
Increasing fixed costs as a percentage of net
operating expenditures
FY96 FY97 FY98 FY99
E::::::I Fixed costs as a percentaga of nat operating axpenditures
-5 yaartrand
FYoo
Formula:
Fixed Costs
Net Operating Expenditures
Fixed Costs
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
o
FY96
FY97
FY98
FY99
FYOO
. Fixed costs
C Nat operating expenditures
Fiscal year: FY96 FY97 FY98 FY99 FYOO
Fixed costs 10,114,000 12,960,000 11,669,000 11,427,000 11,998,000
Net operating expenditures 66,122,000 72,719,000 74,765,000 78,305,000 79,869,000
Fixed costs as a percentage of net operating 15.3% 17.8% 15.6% 14.6% 15.0olc
expenditures
Backl!round
The operating expenditures of every government are composed in part of mandatory and fixed expenditures over which
the government has little short-run control. These include expenditures to which the organization is legally committed
(such as debt service and pension contributions), as well as expenditures imposed by higher levels of government (for
example public records law). The higher the level of fixed expenditures, the less freedom local officials have to adjust
spending in response to economic change. Fixed costs become especially important during periods offmancial
retrenchment, since mandatory expenditures such as debt service are usually unaffected by reductions in service levels.
Analvsis
This analysis examines fixed costs of the General Fund and Special Revenue Funds. These are composed of debt
service, pension contributions and state and federal mandates, which include such things as worker's compensation
premiums, the employer's portion of social security taxes, Federal and State safety training.
The City's fixed costs as a percentage of net operating expenditures has been decreasing slightly over the period analyzed.
This is a positive trend.
19
FRINGE BENEFITS
INDICATOR 13
Clearwater's Trend: Positive
Fringe Benefits
30.0%
10.0%
Warning Trend:
Increasing fringe benefit expenditures as a 20.0%
percentage of salaries and wages
Formula:
Fringe Benefit Expenditures
Salaries and Wages
0.0%
FY96
FY97
FY98
FY99
FYOO
c::::I Fringe benefit as a percentage of salaries and wages -5 year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Fringe benefits expenditures 7,156,000 8,010,000 8,845,000 9,028,000 9,698,000
Salaries and wages 38,405,000 38,214,000 43,015,000 48,221,000 48,208,000
Number of General Fund municipal employees 1,070.6 1,092.3 1,099.6 1,131.4 1,148.3
Number of Grant funded municipal employees 11.0 25.0 19.0 18.0 10.0
Total General & Special Revenue Fund emp 1,081.6 1,117.3 1,118.6 1,149.4 1,158.3
Consumer price index 100.0 102.3 103.9 106.2 109.3
Total salaries and wages per employee (constant
dollars) 35,508 33,433 37,011 39,504 38,078
Fringe benefit as a percentage of salaries and
wages 18.6% 21.0% 20.6% 18.7% 20.1%
Backe:round
Fringe benefits comprise a substantial portion of the City's General and Special Revenue Fund operating costs. The
most common fringe benefits are pension, deferred compensation, health and life insurance, vacation, sick leave, paid
holidays, automobile allowances, and incentive pay. While some fringe benefits such as health and life insurance
require an immediate cash outlay, others such as accumulated sick and holiday leave may require either payment for
the opportunity cost of not having the work done or the cost of hiring additional employees to provide the services. In
order to prevent the uncontrollable escalation of providing fringe benefits, it is necessary to carefully monitor such
costs.
Analvsis
For this analysis, Salaries and Wages include all compensation paid directly to the employees. This includes vacation,
sick leave, incentive pay and deferred compensation. Fringe Benefits include contributions made by the City on behalf
of employees. These include the City's contribution to the pension plan, the City's portion of Social Security and
Medicare, and workers compensation, life and medical insurance premiums paid by the City.
The City's percentage of fringe benefits to its salaries and wages has remained relatively stable over the period
analyzed. This trend is considered positive. Although the City has seen significant increases in medical insurance
costs, from $2,310 to $3,310 per employee in the last few years, control of workers compensation costs have helped to
offset these increases. Workers compensation costs have increased very little, only 3% since fiscal year 1995.
20
OPERATING POSITION
Operating position refers to the local government's ability to balance its budget on a current basis, maintain
adequate reserves for unexpected emergencies, and have sufficient liquidity to pay its bills as they come
due.
During a fiscal year, the government's operating funds either generate operating surpluses or deficits. An
operating surplus will be created when current revenues exceed current expenditures, and an operating
deficit will be created when the current expenditures exceed the current revenues. The surplus or deficit
may be the intentional result of managerial decisions, or the unintentional result ofunpredicted expenditures
or revenue shortfalls. When a deficit is created, funds are drawn from the undesignated (unreserved) fund
balance to cover current expenditures. When a surplus is created, it is added to the undesignated fund
balance.
Reserves result from the accumulation of prior years' surpluses. These reserves can act as a fmancial
cushion in the event of an emergency, fmancial downturn, economic crisis or the unexpected decline or
complete loss of a revenue source.
Liquidity refers to the cash flow in and out of the local government's operations. The government's
revenues are often collected in large amounts and at infrequent intervals throughout the fiscal year. This
may pose a timing problem, as the government's expenditures occur more frequently and regularly
throughout the year. If the local government experiences a cash shortage, it may have to borrow on short-
term notes or delay satisfying its claims. Both of these actions may cost the government additional money,
and can be avoided with adequate reserves. As we analyze the local government's current operating
position we may help identify:
. A pattern of operating deficits;
. A decrease in fmancial reserves;
. A decrease in liquidity;
. Ineffective revenue projection techniques;
. Ineffective budgetary controls.
A credit rating firm would regard a current year operating deficit as a minor warning signal. Funding
practices and the reasons for the deficit would be carefully assessed before it would be considered a
negative factor. The following situations would be given considerably more attention and would be
considered negative factors.
. Two consecutive years of operating fund deficits;
. A current operating fund deficit greater than that of the previous year;
. An operating fund deficit in two or more of the last five years;
. An abnormally large deficit - more than five to ten percent - in anyone year.
City of Clearwater Results
This document looks at the operating surpluses and deficits of the General Fund and the eight enterprise
funds. The City of Clearwater's General Fund operating surplus has decreased significantly in the period
analyzed. However, it continues to be adequate for maintaining a reserve of at least 8% of the next year's
operating budget as required by City policy, a positive trend. The decrease in the undesignated fund
balance is due to some one-time capital expenditures, including the State Road 60 Corridor Beautification,
and Site Development for a new stadium.
Six of the eight enterprise and utility funds reflect operating surpluses during the five years analyzed. Only
the Stormwater Fund and the Harborview Center Operations Fund consistently reflect operating deficits.
The annual 4.3% rate increases being instituted for Stormwater should produce sufficient additional
revenues to improve that fund's operating position.
The City's ratio of cash and short-term investments to current liabilities (liquidity) for the General and
Special Revenue Funds has remained well over the 100% benchmark amount for the last five years. The
City has not experienced any cash flow problems during this period.
21
GENERAL FUND OPERATING SURPLUS
INDICATOR 14
Clearwater's Trend: Positive
General Fund Operating Surplus (Deficit)
(as a percentage of net operating revenues)
Warning Trend:
Increasing general fund operating deficits or decreasing
General Fund operating surplus as a percentage of net
operating revenues
3.0%
1.5%
2.5%
2.0%
Formula:
General Fund Operating Sumlus/Deficit
Net Operating Revenues
1.0%
0.5%
0.0%
-0.5%
FY96
FY97
FY98
Fygg
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
General fund operating surplus (deficit) 1,826,000 1,029,000 418,000 (209,000) 1,812,000
Net operating revenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
General fund operating surplus (deficit) as a
percenta2e of operatin2 revenues 2.8% 1.5% 0.6% -0.3% 2.3%
Backl!round
An operating deficit will occur when the City's current expenditures exceed its current revenues. This does not mean that the
budget is out of balance since reserves from prior years can and will be used to cover the difference. What this does mean is the
City is spending more than it is receiving in that year. On the other hand an operating surplus will occur when the City's current
revenues exceed its current expenditures. Although an operating deficit in any particular year may not be an immediate cause for
concern, frequent and increasing deficits indicate that current revenues are unable to support current service levels. However, a
d~ficit would not indicate a problem if the city had planned the operating deficit and was deliberately drawing down fund balances
or using extra revenues for temporary needs.
Analvsis
This trend is positive. The City has experienced an operating surplus for four of the five years analyzed. Although the one year
amount of the General Fund operating surplus has been decreasing, it continues to be adequate for maintaining a fmancial reserve
(see Indicator #16 on page 28, Undesignated Fund Balance). As of September 30,2000, the total General Fund reserve, which is
commonly referred to as the General Fund Surplus, was a healthy $8,268,274. This is 9.9% of the fiscal year 2001 General Fund
operating budget and well within the City's policy guideline of 8%.
22
ENTERPRISE FUNDS
INDICATOR 15
Backeround
Enterprise losses are highly visible, since the operations of enterprise funds are expected to be managed similar to that of for-
profit business ventures. The associated costs of providing such services are recovered through user fees. Enterprise
revenues are different from other City revenues, in that they are governed by the rules of supply and demand. If the City
were to raise the user fees, the revenues from such services may go down as consumers decrease their demand and become
more conservative.
The City of Clearwater has eight enterprise funds: Water and Sewer, Gas, Solid Waste, Marina, Parking System, Recycling,
Stormwater and Harborview Center. All but two of the enterprise funds are reflecting positive trends. The Stormwater Fund
and the Harborview Center Fund have had operating deficits during most or all of the five years analyzed.
The following graphs take a look at each enterprise fund's income or loss before operating transfers for the last five fiscal
years.
Clearwater's Trend: Positive
Water and Sewer Operating Results
Formula:
Water and Sewer Income or Losses
in constant dollars
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
Warning Trend:
Recurring enterprise losses (constant dollars)
FY96 FY97 FY98 FY99 FYoo
_Operating income (loss) ~ConstanI1996 dollars
-5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Operating income (loss) $3,160,000 $2,889,000 $2,145,000 $2,235,000 $2,677,000
Consumer nrice index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars 53,160,000 52,824,047 52,064,485 52,104,520 52,449,222
Analvsis
Although the trend line slopes downward, the Water and Sewer Fund's operating trend is positive. It produced enough
revenue to cover expenditures during each of the five years studied. Overall this enterprise fund appears to be healthy.
Water rates were increased 6.6% effective 7/1/00. These increases were necessary to provide funding to maintain
compliance with debt service coverage requirements and to provide funding for over $72 million of capital improvement
projects. These initiatives will expand the reclaimed water system and upgrade the water pollution control systems, which
is necessary due to the aging of the facilities and the need to meet regulatory requirements.
23
ENTERPRISE FUNDS
INDICATOR 15
Gas System Operating Results
Clearwater's Trend: Positive
$2,500,000
$2,000,000
Warning Trend:
Recurring enterprise losses (constant dollars)
$1,500,000
$1,000,000
$500,000
$0
Formula:
Gas System Income or Losses in Constant Dollars
FY~ F~7 FY~ FYW FYoo
_Operating income (loss) c::=JConstant 1996 doltars
-5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
IOperating income (loss) $1,421,000 $1,431,000 $2,055,000 $1,205,000 $2,222,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars 51,421,000 51,398,827 51,977,863 51,134,652 $2,032,937
Analvsis
The Gas System operating trend is very positive. The Gas fund is self-supporting and its related costs are recovered through
user fees and service charges. Both its real fund earnings and constant dollar earnings have done well in the five year span
studied. The income of the Gas System is greatly influenced by weather from year to year. A cold winter, as in fiscal year
1998, increases the use of natural gas and consequently increases operating income.
Solid Waste Fund Operating Results
Clearwater's Trend: Positive
$2,000,000
$1,750.000
$1,500,000
$1,250.000
$1,000,000
$750,000
$500,000
$250,000
$0
Warning Trend:
Recurring enterprise losses (constant dollars)
Formula:
Solid Waste Income or Losses in Constant Dollars
FY~ FY97 FY98 FYW FYoo
_Operating income (loss) c::=JConstanll996 doltars
-5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
IOperating income (loss) $884,000 $795,000 $850,000 $1,382,000 $1,886,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars 5884,000 5777,126 5818,094 51,301,318 51,725,526
Analvsis
The Solid Waste operating trend is very positive. The fund reflects a surplus that is increasing in four of the five years
analyzed. The larger increase in fiscal years 1999 and 2000 can be partially attributed to 6.1 % rate increases for those
years.
24
ENTERPRISE FUNDS
INDICATOR 15
Marine Fund Operating Results
FY96 FY97
_Operating income (loss)
-5 year trend (constant dollars)
Clearwater's Trend: Positive
5250,000
$200,000
$150,000
$100,000
$50,000
$0
Warning Trend:
Recurring enterprise losses (constant dollars)
Formula:
Marine Fund Income or Losses in Constant Dollars
($50,000)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Operating income (loss) ($22,000) $82,000 $157,000 $214,000 $198,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars (522,000) 580,156 5151,107 5201,507 5181,153
Analvsis
The Marine Fund had an operating deficit in the first of the five years analyzed. However, the trend is positive and
reflects a healthy surplus in each subsequent year.
Clearwater's Trend: Positive
Parking System Operating Results
Warning Trend:
Recurring enterprise losses (constant dollars)
$1,250,000
$1,000,000
$750,000
$500,000
5250,000
Formula:
Parking System Income or Losses in
constant dollars
$0
FY96 FY97
_Operating income (loss)
-5 year trend (constant dollars)
FY98 Fygg
t:=:I Constant 1996 dollars
FYoo
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
IOperating income (loss) $122,000 $490,000 $200,000 $609,000 $1,119,000
~onsumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars 5122,000 $478,983 5192,493 5573,446 51,023,788
Analvsis
The Parking System operating trend is positive. The fund reflects a surplus each of the five years analyzed, with larger
surpluses in the most recent years. This reflects the impact of the fifty cents per hour rate increase for the three cashiered
beach lots which went into effect 6/1/99.
25
ENTERPRISE FUNDS
INDICATOR 15
Recycling Fund Operating Results
Clearwater's Trend: Positive
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
so
Warning Trend:
Recurring enterprise losses (constant dollars)
Formula:
Recycling Income or Losses in Constant Dollars
FY96 FY97 FY98 FY99
_Operating income (loss) .:::::::::JConstant1996 dollars
-5 year trend (constant dollars)
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
IOperating income (loss) $347,000 $550,000 $446,000 $366,000 $763,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars $347,000 $537,634 $429,259 $344,633 $698,079
Analvsis
The Recycling Fund operating trend is positive. The fund reflects a surplus in each of the five years analyzed. In fiscal
year 2000, the fund benefited from higher than expected market prices for recycled commodities.
Stormwater Fund Operating Results
Clearwater's Trend: Positive
$750,000
$500,000
$250,000
so
($250,000)
($500,000)
($750,000)
Warning Trend:
Recurring enterprise losses (constant dollars)
Formula:
Stormwater Income or Losses in Constant Dollars
FY96 FY97 FY98 FY99
_Operating income (loss) .:::::::::JConslant 1996 dollars
-5 year trend (conslant dollars)
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
IOperating income (loss) ($221,000) $197,000 ($510,000) $299,000 $503,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars ($221,000) $192,571 ($490,857) $281,544 $460,201
Analvsis
The Stormwater Fund operating trend is positive. Although the fund reflects a deficit in two of the five years analyzed,
the most recent years reflect increasing operating income. This improvement is being aided by rate adjustments. A 33%
rate increase in fiscal year 1999 and 4.3% rate increases in fiscal years 2000 and 2001 have been enacted. Additional
4.3% rate increases are proposed for the next two fiscal years, 2002 and 2003. These additional revenues should enable
the fund to cover its operating expenditures in future years.
26
ENTERPRISE FUNDS
INDICATOR 15
Harborview Fund Operating Results
Clearwater's Trend: Negative
$0
(5200,000)
($400,000)
($600,000)
(S800.000)
($1.000,000)
($1.200,000)
Warning Trend:
Recurring enterprise losses (constant dollars)
Formula:
Harborview Income or Losses in Constant Dollars
FY96 FY97 FY98 FY99
_Operabng income (loss) ~Constant 1996 dollars
-5 year trend (constant dollars)
FYoo
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
IOperating income (loss) ($699,000) ($889,000) ($1,015,000) ($921,000) ($835,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars ($699,000) ($869,013) ($976,901) ($861,232) ($763,952)
Analvsis
The Harborview Center has been unable to support itself since it opened in fiscal year 1996. It reflects operating deficits for
each of the five years analyzed. Even though the annual gap between operating expenditures and operating revenues is
decreasing, there continues to be a significant deficit every year. While the Harborview Center has shown signs of success
it is still currently unable to support its related costs through user fees and service charges.
On January 18,2001, the City Commission approved the allocation of$2.2 million of unrestricted retained earnings of the
Central Insurance Fund to payoff the accumulated cash deficit of the Harborview Fund, including an outstanding loan from
the Special Development Fund amounting to $86,291. This will save the Harborview Fund approximately $106,000 of
interest expense annually. In addition, the annual cash deficit, estimated at approximately $200,000 will be budgeted each
year beginning in fiscal year 2002 as a contribution from the General Fund to avoid this situation in the future. This action
will reduce the annual operating deficits of the Harborview Fund, but will not in itself enable the fund to become self
supporting.
27
UNDESIGATED FUND BALANCE
INDICATOR 16
. Undesignated General Fund Balance
Clearwater's Trend: Positive
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Warning Trend:
Declining undesignated fund balance as a
percentage of net operating revenues
Formula:
Undesignated General Fund Balance
Net Operating Revenues
FY96
FY97
FY98
FY99
FYOO
C Undesignated fund balances as a percentage of net operating
revenues
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Undesignated general fund balance 10,290,000 8,512,000 9,080,000 8,647,000 8,268,000
[Net operating revenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
Undesignated fund balances as a percentage of
net operating revenues 15.7% 12.5% 12.8% 11.9% 10.5%
Backl!round
Positive fund balances can be thought of as [mancial reserves. This is not to say that the entire fund balance is
available for appropriation, however it can affect the City's ability to survive a financial crisis. It may also allow the
City to accumulate funds for capital expenditures and avoid a need to borrow. Regardless of the City's intended use
for its fund balance, a decrease could indicate the inability to meet a future obligation.
In states that allow it, jurisdictions usually try to operate each year at a small surplus to maintain positive fund
balances and thus maintain adequate reserves. Nonspecific or general reserves are usually carried on the books as an
unreserved fund balance in the general operating fund. This is commonly referred to as the General Fund Surplus.
Sometimes special reserves are maintained in a separate fund. For example, reserves for replacing equipment such
as printers or copying machines may be kept in the fund balance of an internal service fund. Reserves can also be
appropriated as a budget item in some form of contingency account. Regardless of the way in which reserves are
recorded, an unplanned decline in fund balances may mean that the government will be unable to meet a future
need.
Analvsis
The City's percentage of its undesignated General Fund balance to its net operating revenues has been steadily
decreasing over the measurement period. This is normally a negative trend as it demonstrates the City's decreased
ability to withstand the effects of an unforeseen [mancial emergency. However, the reduced fund balance is a direct
result ofa change in Commission policy. In fiscal year 2000 the City Commission reduced the undesignated
balance of the General Fund from 10% to 8% of the next year's approved operating budget. In addition, any
reduction in fund balance is a result of funding major one-time capital projects, not as a method of balancing the
General Fund operating budget. In fiscal year 2001, the reduced reserve became a formal policy, because an 8%
reserve was deemed sufficient as an emergency fund. So even though this trend appears at first glance to be
negative, the City's undesignated fund balance remains healthy.
28
LIQUIDITY
INDICATOR 17
Warning Trend:
Liquidity
1400.0%
1200.0%
1000.0%
800.0%
600.0%
400.0%
200.0%
0.0%
FY96 FY97 FY98 FY99 FYoo
Clearwater's Trend: Very Positive
Decreasing amount of cash and short-term
investments as a percentage of current liabilities
Formula:
Cash and short-term investments
Current Liabilities
~ Cash and short-tarm invastmants as a percentaga of currant Iiabilitias
-5 yaar trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Cash and short-term investments 18,899,000 17,863,000 18,834,000 18,513,000 19,870,000
Current liabilities 2,524,000 5,538,000 2,945,000 3,336,000 1,688,000
Cash and short-term investments as a
percentage of current liabilities 748.8% 322.6% 639.5% 554.9% 1177.1%
Backl!round
The City's cash position is a good indicator of its short-run fmancial condition. Cash position includes cash on hand
and other short-term investments (I.e., U.S. Treasury Securities) which can be readily converted into cash.
Liquidity is the measure of the City's ability to pay its short-term obligation as they come due. As liquidity
decreases, the City may have difficulty meeting its long-term obligations. A poor cash position may be an early
indication ofthis dilemma. A liquidity ratio of less than one to one (100%) is considered a negative factor by the
credit industry.
Analvsis
The City of Clearwater's ratio of cash and short-term investments to its current liabilities for the General and
Special Revenue Funds has remained well over 100% for each of the Fiscal years analyzed. This trend is
considered very positive, and it indicates that the City is conservative in its spending practices and therefore should
not experience cash flow problems in satisfying short and long-term obligations.
29
DEBT INDICATORS
Although debt is an effective way to finance capital improvement projects or to solve temporary cash
shortages caused by uneven revenue flows, it must be utilized wisely and conservatively. The inability to
repay debt on time can damage a government's credit rating, increasing the cost of future borrowings.
A sign of financial concern occurs when the government "rolls over" short-term debt from one year to the
next. Rolling over debt is the act of securing a new loan to satisfy a short-term debt obligation. This
practice tends to indicate that the government is financing its operating deficits and unable to sustain itself.
The most common forms of long-term debt are general obligation, special assessment and revenue bonds.
Even when such forms of debt are utilized to finance capital projects, the local government needs to make
sure that the current revenue bases will be adequate and capable of satisfying the future claims as they come
due.
The government must also pay special attention to overlapping debt. If an overlapping jurisdiction were to
default, the government may become responsible for satisfying the debt, providing services or both.
Under ideal conditions, the government's debt should be proportional in size and rate of growth to its tax
base, not exceed the useful life of the assets it is financing, not be utilized for normal everyday operations,
and not create such a heavy burden on current revenues that operating expenditures will suffer. Finally, it
should not be high enough to jeopardize the government unit's credit rating.
Analysis of the government's debt structure may identify:
· Inadequate cash management or expenditure controls;
. Increasing reliance on long-term debt;
· Decreasing expenditure flexibility as fixed payments for principal and interest on long-term
debt increase;
. Use of short-term debt to fmance current obligations;
. Sudden and large changes in future debt service.
City of Clearwater Results
The City of Clearwater's debt structure is extremely positive. All City trends for debt are well within
industry benchmarks, and indicate the City has no reason for concern in this area.
30
CURRENT LIABILITIES
INDICATOR 18
Current Liabilities
Formula:
Current liabilities
Net operating revenues
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
FY96 FY97
Clearwater's Trend: Very Positive
Warning Trend:
Increasing current liabilities at the end of the
year as a percentage of net operating
revenues
FY98 FY99
c=:::J Current liabilities as a percentage of net operating revenues
-5 year trend
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Current liabilities 2,524,000 5,538,000 2,945,000 3,336,000 1,688,000
~et operating revenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
Current liabilities as a percentage of net
operating revenues 3.9% 8.1% 4.2% 4.6% 2.1%
Backe:round
Current liabilities are defmed as the sum of all liabilities due at the end of the fiscal year. These include short-term
debt, the current portion of long-term debt, all accounts payable and accrued liabilities. Short-term debt is the
portion that concerns the credit industry. If short-term debt exceeds five percent of operating revenues, or if it
increases for two consecutive years, the credit industry considers it a negative trend. Such a trend can indicate
liquidity (cash flow) problems or deficit spending.
Analvsis
The current liabilities of the City of Clearwater's General, Special Revenue and Debt Service Funds have been less
than five percent of operating revenues for four of the five years analyzed. The large increase in current liabilities in
fiscal year 1997 is due to the reclassification of several long-term loans related to the Harborview Center. These
loans were paid off early, at the end of fiscal year 1998. This indicator reflects a very positive trend of decreasing
liabilities as a percentage of net operating revenues, and is an indication that the City is having no liquidity
problems.
31
LONG- TERM DEBT
INDICATOR 19
Net Direct Bonded Long-term Debt
Clearwater's Trend: Positive
0.30%
0.25%
Warning Trend:
0.20%
Increasing net direct bonded long-term debt
as a percentage of assessed valuation
0.15%
0.10%
Formula:
Net direct bonded long-term debt
Assessed valuation
0.05%
0.00%
FY96 FY97 FY98 FY99 FYOO
c:=J Net direct bonded long-term debt as a percentage of assessed valuation
-5 year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Net direct bonded long-term debt 12,037,000 11,203,000 10,685,000 10,259,000 9,950,000
Assessed valuation 4,252,000,000 4,377,000,000 4,494,000,000 4,692,000,000 4,903,000,000
Net direct bonded long-term debt as a
percentage of assessed valuation 0.28% 0.26% 0.24% 0.22% 0.20%
Backl!round
Direct debt is bonded debt for which the local government has pledged its full faith and credit. It does not include the debt of
overlapping jurisdictions such as school districts. Self-supporting debt is bonded debt that the local government has pledged to
repay from a source separate from its general tax. revenues such as stormwater bonds to be repaid from stormwater user fees.
Net Direct debt is direct debt minus self-supporting debt. An increase in net direct bonded long-term debt as a percentage of
assessed valuation can mean the government's ability to repay is decreasing if it depends on the property tax to repay its debts.
The credit industry considers an increase of twenty percent over the previous year in overall net debt as a percentage of market
valuation a negative trend.
Analvsis
The City of Clearwater's net direct bonded debt has decreased steadily over the five years analyzed. The last of the general
obligation bonds were paid off in fiscal year 1999. This indicator includes the bonds for the construction of the police building,
which are to be repaid from Public Service Tax revenues. Although not considered General Obligation Debt, since these bonds
are being repaid from a specific tax source, the source used, public service tax revenues, are part of the City's general tax
revenues. This indicator does not include any loans which will be repaid from infrastructure taxes (Penny for Pinellas). These
debts are considered self-supporting. The City's trend is positive.
32
DEBT SERVICE
INDICATOR 20
Debt Service
7.0%
Clearwater's Trend: Positive 6.0%
5.0%
Warning Trend:
Increasing net direct debt services as a 4.0%
percentage of net operating revenues 3.0%
2.0%
Formula: 1.0%
Net direct debt service
Net operating revenues 0.0%
FY96 FY97 FY9B FY99 FYOO
c=:::I Net direct debt service as a percentage of net operating revenues -5 year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
~et direct debt service 2,496,000 4,328,000 2,402,000 2,230,000 2,141,000
lNet operating revenues 65,336,000 68,212,000 70,861,000 72,910,000 78,617,000
Net direct debt service as a percentage of net
operating revenues 3.8% 6.3% 3.4% 3.1% 2.7%
Backe:round
Debt service is defmed here as the amount of principal and interest that a local government must pay each year on direct
bonded debt and direct short-term debt. Increasing debt service reduces expenditure flexibility and could cause fiscal
strain. The credit industry considers debt service equal to ten percent of operating revenues acceptable. Twenty percent
is considered a problem.
Analvsis
The City of Clearwater's debt service for this indicator includes payments on General Obligation Bonds, Improvement
Revenue Bonds (new police building), Public Service Tax and Bridge Revenue Bonds, Notes and Mortgages (including
lease purchases), but does not include debt service on intemalloans. The trend is positive since the percentage of
operating revenues is well below the twenty percent problem threshold, and is decreasing over the five year period
analyzed.
33
OVERLAPPING DEBT
INDICATOR 21
Clearwater's Trend: Positive
Overlapping Debt
0.150%
Warning Trend:
Increasing long-term overlapping bonded
debt as a percentage of assessed valuation
0.100%
Formula:
Long-term overlaooing bonded debt
Assessed valuation
0.050%
0.000%
FY96
FY97
FY98
FY99
FYOO
_ Long-term overlapping debt as a percentage of
assessed valuation
- 5 year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Overlapping net debt 122,000 67,000 13,000 0 6,390,000
!Assessed valuation 4,252,000,000 4,377,000,000 4,494,000,000 4,692,000,000 4,903,000,000
lLong-term overlapping debt as a
Ipercenta2e of assessed valuation 0.003% 0.002% 0.000% 0.000% 0.130%
Backe:round
Overlapping debt is the net direct bonded debt of another jurisdiction that is issued against a tax base within part or all of the
boundaries of the local government. These jurisdictions may be school districts, lighting districts, sewer districts, etc. This
indicator measures the ability of the community's tax base to repay the debt obligations issued by all its governmental
jurisdictions. If other jurisdictions default, the local government may have a contingent, moral or political obligation to assume
the debt or provide the service.
Analvsis
The only overlapping debt obligation during the five years analyzed has been from the Pinellas County School Board. The old
bonds have been completely repaid, as have all General Obligation Bonds of the City of Clearwater. The City of Clearwater's
obligation related to the new school bonds in fiscal year 2000 amounts to approximately one tenth of a percent of the city's
assessed valuation. This is a very small contingent obligation for the City.
34
UNFUNDED LIABILITY INDICATORS
An unfunded liability is an obligation that has been incurred during the current or a prior year, that does not
have to be paid until a future year, and for which reserves have not been set aside. It is similar to long-term
debt since it represents a legal commitment to pay in the future. Such obligations can create serious
problems if they are allowed to grow unnoticed over a long period of time.
The two most significant unfunded liabilities being examined in this document are pension liability and
compensated absences (unused sick leave and vacation leave to be paid at termination or retirement). Both
of these accumulate gradually over time, and neither shows up in ordinary fmancial records in a way that
makes their impact readily apparent.
An analysis of the local government's unfunded liabilities may identify:
. How fast the pension liability is growing, and more importantly, how much is unfunded;
. Whether pension contributions, assets and investment earnings are keeping pace with the growth
in benefit obligations;
. Whether the amount of unused employee vacation and sick leave is increasing;
. Whether policies for payment for unused vacation and sick leave are compatible with the local
government's ability to pay.
City of Clearwater Results
The City of Clearwater's pension plans' assets are increasing in relation to their annual benefit payments.
There is no indication that any of the City's pension plans will have problems meeting benefit obligations.
Compensated absences, however, reflect a marginal trend. Although increasing over the five years
analyzed, we have actually seen a decrease in this indicator over each of the last two years. It appears the
impact of recent changes in benefits, which reduced the total number of hours an employee may retain and
also the rate at which such hours are accumulated, is beginning to produce improved results in this area.
We will need to watch this area carefully in the next several years.
35
UNFUNDED PENSION LIABILITY
INDICATOR 22
Clearwater's Trend: Marginal
Unfunded Pension Liability (Surplus)
Employee Pension Fund
2.0%
1.5%
Warning Trend: 1.0%
Increasing unfunded pension liability as a 0.5%
percentage of assessed valuation 0.0%
-0.5%
-1.0%
-1.5%
-2.0%
Formula:
Unfunded pension liability
Assessed valuation
1996
1997
1998
1999
2000
c:::J Unfunded pension plan liability (surplus) as a percentage of assessed valuation
-5 year trend
Fiscal Year: 1996 1997 1998 1999 2000
lunfunded pension plan liability (surplus)
Emplovee Pension Fund 26,380,000 25,546,000 24,654,000 23,700,000 75,601,000
k\ssessed valuation 4,252,000,000 4,377,000,000 4,494,000,000 4,692,000,000 4,903,000,000
IUnfunded pension plan liability (surplus) as a
loercental!e of assessed valuation 0.6% 0.6% 0.5% 0.5% 1.5%
Backl!round
Pension plans can represent a significant expenditure obligation for local governments. Basically, there are two ways to fund
pension plans: either when benefits need to be paid (pay as you go) or as benefits are accrued by investing money in a reserve
against the time when benefits will have to be paid (full funding). Under the pressure of balancing the annual budget, some
governments choose the pay as you go approach or a partial funding approach. These approaches can create a problem in a
future year if the funding is not available to meet pension obligations.
Growth in unfunded liability for vested benefits places an increasing burden on the tax base. When property taxes are the primary
source of General Fund revenue the significance of this burden in relation to the community's ability to pay can be measured by
comparing the unfunded liability to changes in assessed valuation.
Analvsis
The City of Clearwater Employee Pension Plan underwent a major change effective April 1, 2000 when, among other changes, an
automatic annual 1.5% cost of living allowance benefit was added to the plan. This is responsible for the sharp increase in
unfunded liability in 2000. However, the plan currently has a credit balance of$12.4 million, and the market value of the plan's
assets exceeds the actuarial value by more than $76 million. It is not anticipated that the City will need to increase contributions
above the 7% of payroll which is the current requirement.
36
PENSION ASSETS
INDICATOR 23
Ratio of Pension Assets to Benefits Paid
6000%
Clearwater's Trend: Very Positive
5000%
4000%
Warning Trend:
Decreasing value of pension plan assets as a
percentage of benefits paid
3000%
2000%
Formula:
Pension plan assets
Annual pension benefits paid
1000%
0%
FY96 FY97 FY98 FY99
c:=:J Ratio of assets to benefits paid - Employees' Plan
_ Ratio of assets to benefits paid - Firemen's Plan
-5 year trend - Firemen's
- 5 year trend - Employees'
FYoo
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Employees' Pension plan assets 246,115,000 359,987,000 369,093,000 429,574,000 502,308,000
Emplovees' Pension plan benefits paid 6,013,000 7,449,000 8,266,000 9,801,000 10,440,000
Ratio of assets to benefits paid - Employees' Plan 4093% 4833% 4465% 4383% 4811 %
Firemen's Pension plan assets 2,514,000 2,886,000 3,159,000 3,294,000 3,543,000
Firemen's Pension plan benefits paid 965,000 973,000 971,000 979,000 976,000
Ratio of assets to benefits paid - Firemen's Plan 261% 297% 325% 336% 363%
Backl!round
A pension plan's assets are held primarily as cash or investments. A decline in the ratio of plan assets to benefits due can
indicate serious problems in the management of the pension plan. The annual amount of pension receipts as a percentage of
annual benefits paid focuses more specifically on a pension plan's ability to meet its current cash requirements.
Analvsis
The City of Clearwater has four pension funds: the Employees' Pension Fund, the Firemen's Pension Fund, the Police
Supplemental Fund and the Firemen's Supplemental Fund. Only the Employees' Pension Fund and the Fireman's Pension
Fund have an impact on the City's budget. The two supplemental funds are funded by the State.
Both of the City funded pension plans reflect a positive trend of increasing assets as a percentage of benefits paid for the five
years analyzed. This is primarily due to the strong performance of the pension fund investments in recent years.
37
ACCUMULATED EMPLOYEE LEAVE
INDICATOR 24
Clearwater's Trend: Marginal
Accrued Compensated Absences
Warning Trend:
Increasing number of unused vacation and sick
leave days per municipal employee
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
Formula:
Accrued compensated absences
Number of employees (FTE's)
FY96 FY97 FY98 FY99 FYOO
t=lAccrued Compensated absences per employee (constant dollars)
_Accrued Compensated absences per employee
-5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Accrued Compensated absences 4,016,000 4,061,000 5,962,000 5,848,000 5,150,000
General Fund employees. 1,070.6 1,092.3 1,099.6 1,131.4 1,148.3
Grant funded employees. 11.0 25.0 19.0 18.0 10.0
Other Funds employees. 592.2 594.2 605.2 619.7 628.1
Total number of employees (FTE's) 1,673.8 1,711.5 1,723.8 1,769.1 1,786.4
Accrued Compensated absences per employee $2,399 $2,373 $3,459 $3,306 $2,883
Consumer Price Index 100.0 102.3 103.9 106.2 109.3
Accrued Compensated absences per employee
I(constant dollars) $2,399 $2,319 $3,329 $3,113 $2,638
· Full Time Equivalents (FTE's)
Back2round
Local governments usually allow their employees to accumulate some portion of unused vacation and sick leave to be paid
at termination or retirement. Although leave benefits initially represent only the opportunity cost of not having work
performed, these benefits become a real cost when employees are actually paid for their accumulated leave. This liability
should be closely watched to ensure that vacation and sick leave policies do not contribute to an excessive increase in
unfunded liability.
Analvsis
The City's trend over the five years analyzed reflects an increase in the cost of accrued compensated absences per
employee. However, a closer look shows the City may be turning the comer. This trend is marginal. Both the total number
of hours an employee may retain, and the rate at which such hours are accumulated have been reduced in recent years. As a
result the constant dollar accrued compensated absences per employee have dropped by 15% in the last year and have
shown a 21 % decrease in the last two years. As long time employees leave, the newer employees will not be able to
accumulate as much unused leave time, and the trend should level off, or even decrease.
38
CAPITAL PLANT
Most of a local government's wealth is invested in its fIxed assets or its capital plant, which includes such
things as streets, sidewalks, buildings, utility systems, vehicles, computers and other equipment. All of
these assets require repairs, maintenance and eventual replacement. If these assets are not properly
maintained, one if not all of the following will happen. First, it will lead to increased breakdowns or
obsolescence, making assets less useful. Secondly, it will eventually cost the local government more to
replace or repair them Lastly, it will decrease the community's appearance and its attractiveness as a place
in which to live and work.
Some governmental entities defer the cost of capital expenditures in order to reduce expenditures without
impacting services. If this deferment becomes an ongoing practice any of the following may occur:
. Safety hazards and potential lawsuits may result (i.e., deteriorating sidewalks);
. Reductions in the value of residential and commercial property;
. Lost efficiency due to equipment shortages resulting from excessive repair time;
. Increased costs to rehabilitate deteriorated structures because of inadequate maintenance;
. Increases in the future outlays of cash for equipment created by a replacement and
maintenance backlog.
City of Clearwater Results
This document looks at the maintenance of eleven types of capital plant. Approximately three fourths of
them are displaying level or slowly increasing maintenance effort. Three of them are reflecting negative
trends of decreasing maintenance effort. These are the marina, streets, and storm sewers.
The capital outlay of the General and Special Revenue Funds exclusive of capital improvement projects is
fairly constant over the last fIve years. This implies that equipment is being replaced at a constant rate and
replacements are not being postponed.
A look at depreciation expenditures for the enterprise and internal service funds leads to the same
conclusion. Since depreciation expenditures as a percentage of total fIxed assets are increasing slightly for
both categories, it can be concluded that asset replacement is not being postponed.
39
MAINTENANCE EFFORT
INDICATOR 25
Backe:round
Most of the City's wealth is invested in its physical assets or capital plant, such things as streets, buildings, utility systems
and motorized equipment. If these assets are not properly maintained, or are allowed to become obsolete, the results are
decreasing usefulness of the assets, increasing cost of maintaining and replacing them and decreasing attractiveness of the
community as a place to live or do business.
In general, maintenance expenditures should remain fairly stable in constant dollars relative to the amount of the assets.
A declining ratio between maintenance expenditures and the size of the asset may be a sign that the government's assets
are deteriorating.
This document looks at eleven capital plant assets. Approximately three fourths reflect positive trends. However, streets
and storm sewers are showing negative trends of decreasing maintenance effort over the last five fiscal years. The marina
also reflects a trend of decreasing maintenance over this time period, but due to the nature of this operation's
expenditures, which tend to occur at irregular intervals, this does not reflect a decrease in effort for the marina.
The following graphs look at the maintenance of a wide assortment of City assets.
40
MAINTENANCE EFFORT
INDICATOR 25
Water and Sewer Mains
Clearwater's Trend: Positive
Water and Sewer Mains
Warning Trend:
Declining expenditures for maintenance of water
and sewer lines per mile of water and sewer line
$2,500
$2,000
$1,500
$1,000
Formula:
Expenditures for repair and maintenance
of water and sewer mains
miles of water and sewer mains
$500
$0
FY96 FY97 FY98
_ Water & Sewer Main Expenditures per mile
c:JConstant 1996 doltars expenditures per mile
-5 year trend (constant dollars)
FY99
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
VI ater & Sewer Main Expenditures $1,299,000 $1,578,000 $1,480,000 $1,246,000 $1,878,000
Miles 840 841 841 843 845
VI ater & Sewer Main Exoenditures oer mile $1,546 $1,876 $1,760 $1,478 $2,222
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars exoenditures oer mile $1,546 $1,834 $1,694 $1,392 $2,033
Analvsis
The City of Clearwater maintains 522 miles of water transmission and distribution mains, over 3,000 fire hydrants and
323 miles of sanitary sewer mains. In addition to replacement of service lines, maintenance includes jetting, rodding and
vapor rooting to clear sewer lines of grease, debris and tree roots, adjustment and construction of manholes, and
responding to sewer stoppages.
The Water and Sewer's operating trend is considered positive over the five years analyzed. The constant dollar amount of
expenditures per mile for maintenance of water and sewer mains has fluctuated, but overall reflects an increase since
fiscal year 1996. Rate increases for water effective July 1,2000 should help to level out maintenance expenditures in
future years.
41
MAINTENANCE EFFORT
INDICATOR 25
Gas Mains
Gas Mains
Clearwater's Trend: Positive
$350
$300
$250
$200
$150
$100
$50
$0
FY96
Warning Trend:
Declining constant dollar expenditures for
maintenance of gas mains per mile of gas main
Formula:
Expenditures for repair and maintenance
of gas mains (constant dollars)
miles of gas mains
FY97
FY98
FY99
FYOO
I_ Gas main expenditures per mile C Constant 1996 dollars I
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Gas main expenditures $187,000 $59,000 $84,000 $76,000 $93,000
Miles 565 579 606 621 631
Gas main expenditures per mile $331 $102 $139 $122 $147
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars $331 $100 $133 $115 $135
Analvsis
The Clearwater Gas System is responsible for 631 miles of gas mains. In addition it maintains service lines and repairs
leaks inside customers' buildings.
The Gas operating trend is positive for the four most recent years, reflecting a slightly increasing effort. Fiscal year 1996
is an anomaly, and should not be included when determining a trend. The higher expenditures in 1996 represent more than
one year of maintenance effort in the capital projects. That was a "catch up" year in which some old maintenance projects
were completed and closed out. Each subsequent year represents only that year's maintenance expenditures. Also,
beginning in fiscal year 1996, the Gas System shifted its focus to greatly expanding the system, and has heavily
concentrated its resources in that direction in every subsequent year.
42
NUUNTENANCEEFFORT
INDICATOR 25
Solid Waste Repair & Maintenance
Solid Waste Fund Repair & Maintenance
Warning Trend:
$70
$SO
$50
$40
$30
$20
$10
$0
Clearwater's Trend: Positive
Decreasing Current Solid Waste Fund Maintenance
and Repair Expenditures per 100 population
Formula:
Solid Waste Maintenance and Reoair Exoenditures
100 population
FY96
FY97
FY98
FY99
FYOO
_Repair & maintenance per 100 population
t:=:J Constant 1996 dollars
-5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Solid Waste reoair & maintenance $64,000 $64,000 $54,000 $63,000 $76,000
1P0oulation 101,867 102,472 102,874 104,281 104,454
lRepair & maintenance per 100 population $63 $62 $52 $60 $73
Consumer orice index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars $63 $61 $51 $57 $67
Analvsis
The Solid Waste operation maintains both the transfer station and collections containers. The transfer station accepts
garbage from route collection vehicles and compacts it into tractor/trailer rigs for the long haul to the Pine lias County
Resource Recovery Plant. The transfer station operates two compaction pits and seven tractor-trailer rigs, and provides
certified weights of all solid waste vehicles. Solid waste also maintains approximately 3,600 commercial, 27,000
residential and 1,200 multi-family recycling containers, 26,800 curbside recycling bins, 140 open roll-off containers and
25 compactors. Maintenance includes such things as repair of lids, wheels and tags to keep containers in service.
The Solid Waste operating trend is positive. The fund is showing a nearly level maintenance effort in constant dollars
over the five years analyzed.
43
MAINTENANCE EFFORT
INDICATOR 25
Harborview Center
Harborview Center Repair & Maintenance
Clearwater's Trend: Positive
$50,000
Warning Trend:
Decreasing maintenance expenditures (constant
dollars)
$40,000
$30,000
520,000
Formula:
Harborview reoair and maintenance expenditures
Consumer Price Index
$10,000
$0
FY96
FY97
FY98
FY99
FYoo
_ Harborview maintenance & repair E:::::J Constant 1996 dollars
5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Harborview maintenance & repair $1,000 $14,000 $23,000 $42,000 $34,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars $1,000 $13,685 $22,137 $39,548 $31,107
Analvsis
The Harborview Center was a new operation in fiscal year 96. Therefore it had minimal maintenance expenditures that
year. These expenditures, such as elevator and roof repairs, have increased in the subsequent years analyzed, which is to
be expected as the activity at the Center increases.
44
MAINTENANCE EFFORT
INDICATOR 25
Marina
Clearwater's Trend: Positive
Marina Maintenance
Formula:
Expenditures for repair and maintenance
of boat slips (constant dollars)
number of boat slips
$400
$350
$300
$250
$200
$150
$100
$50
$0
Warning Trend:
Declining constant dollar expenditures for
maintenance of boat slips
FY96 FY97 FY98 FY99
_ Marina expenditures per boat slip
[=:J Constant 1996 dollars expenditures per slip
-5 year trend (constant dollars)
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO I
lMarina maintenance exoenditures $71,000 $73,000 $40,000 $32,000 $41,000
!Boat slips 210 209 209 210 209
lMarina expenditures per boat slip $338 $349 $191 $152 $196
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars exoenditures per slio $338 $341 $184 $143 $179
Analvsis
The Marina's maintenance expenditures reflect costs for docks, boat slips, the marina building, fishing piers other than
Pier 60, sidewalks and parking lot. There have been significant additions and improvements done during fiscal years
1996, 1997 and 1998. Some of these are replacement of light fixtures, modification of fuel tanks, installation ofa
portable pumpout sewage system for Island Estates, replacement of computers and printers, power pedestals for the main
and east docks, renovations of the marina restrooms, and the construction of fishing piers on Sand Key and a new fishing
pier at the east end of the marina. The marina budgets approximately $50,000 per year for routine maintenance in the
Capital Improvement Program, but the expenditures tend to fluctuate from year to year.
The Marina's five year trend for repair and maintenance per boat slip reflects decreasing expenditures. Even though this
appears to be a negative trend, there has actually been a constant level of funding for maintenance. The necessary repairs
do not tend to occur evenly from year to year. As long as maintenance continues to be funded at a uniform level, the
decrease in maintenance expenditures is no reason for concern.
45
MAINTENANCE EFFORT
INDICATOR 25
Garage Equipment
Clearwater's Trend: Positive
Garage Units of Equipment Maintenance
Formula:
Expenditures for repair and maintenance
of eauipment (constant dollars)
number of units
$3.500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
Warning Trend:
Declining constant dollar expenditures for
maintenance of equipment
FY96 FY97 FY98
_ Garage expenditures per unit
c:::I Constant 1996 dollars expendnures per unit
-5 year trend (constant dollars)
FY99
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Garage eauipment maintenance $3,496,000 $3,510,000 $3,601,000 $3,999,000 $4,024,000
IUnits of eauipment 1,392 1,336 1,423 1,302 1,226
Garage expenditures per unit $2,511 $2,627 $2,531 $3,071 $3,282
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars expenditures per unit $2,511 $2,568 $2,436 $2,892 $3,003
Analvsis
The City Garage facility performs all necessary functions involved to maintain heavy equipment, automobiles, light
trucks, small equipment and construction equipment owned and operated by the City. This includes a preventive
maintenance program designed to provide the safest possible equipment for the best useful life of the equipment, and a
repair program designed to absorb non-scheduled repairs.
The Garage facility has been making use of its new fleet maintenance system to help determine the optimal time to
replace equipment, before repairs become costly. The small increase in maintenance expenditures per unit is a positive
trend. A greater increase would indicate equipment being kept in use beyond its useful life and thus requiring more
frequent and expensive repairs.
46
MAINTENANCE EFFORT
INDICATOR 25
Recycling Repair & Maintenance
Clearwater's Trend: Positive
Recycling Fund Repair & Maintenance
Warning Trend:
$60
$50
$40
$30
$20
$10
$0
FY96
FY97 FY98 Fygg
_Repair & maintenance per 100 population
~Constantl996 dollars
-5 year trend (constant dollars)
Decreasing Current Recycling Fund Maintenance
and Repair Expenditures per 100 population
Formula:
Recvcling Maintenance and Repair Expenditures
100 population
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
ecvcling reoair & maintenance $13,000 $28,000 $30,000 $16,000 $63,000
opulation 101,867 102,472 102,874 104,281 104,454
teoair & maintenance per 100 population $13 $27 $29 $15 $60
onsumer price index 100.0 102.3 103.9 106.2 109.3
onstant 1996 dollars $13 $27 $28 $14 $55
Analvsis
Recyclables are processed and marketed through the Solid Waste Recovered Materials Processing Center at the Solid
Waste complex. The Recycling processing facility has averaged approximately 1,000 tons per month of processed and
shipped recyclables.
The Recycling operating trend is positive. Although there are fluctuations from year to year, the five year trend reflects
an increasing level of maintenance effort.
47
MAINTENANCE EFFORT
INDICATOR 25
Buildings
Clearwater's Trend: Positive
Buildings Maintenance
$2.00
FY96 FY97 FY98
_ Buildings expenditures per square foot
~Constant 1996 dollars expenditures per square foot
-5 year trend (constant dollars)
FYOO
Warning Trend:
Declining constant dollar expenditures for
maintenance per square foot of building
$1.50
$1.00
$0.50
Formula:
Expenditures for repair and maintenance
of buildings (constant dollars)
square feet of buildings
$0.00
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Buildings operating maintenance $1,557,000 $1,709,000 $1,894,000 $1,861,000 $1,985,000
Capital maintenance projects $158,000 $93,000 $202,000 $65,000 $170,000
Total maintenance $1,715,000 $1,802,000 $2,096,000 $1,926,000 $2,155,000
Square feet 1,154,000 1,154,000 1,153,000 1,183,000 1,173,000
Buildings expenditures per square foot $1.49 $1.56 $1.82 $1.63 $1.84
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars expenditures per square
foot $1.49 $1.53 $1. 75 $1.53 $1.68
Analvsis
This indicator looks at the maintenance of all City buildings. The expenditures reflect the Building and Maintenance
operation less the utility expenditures for electricity, gas, water and sanitation. The costs of the "projects crew" that works
on new capital building construction projects has also been deducted from the operating expenditures. Capital
maintenance projects reflect citywide expenditures for such items as roof and air conditioning system repair and
replacement. The Buildings maintenance effort reflects slowly increasing expenditures per square foot during the period
analyzed, a positive trend.
There was a higher than normal increase in maintenance expenditures in fiscal year 1998. This was due to handling the
backlog of work that occurred during the four months of the previous year that normal maintenance work was postponed
so building and maintenance employees could renovate City Hall.
48
MAINTENANCE EFFORT
INDICATOR 25
Streets
Clearwater's Trend: Negative
Warning Trend:
Declining constant dollar expenditures for
maintenance per mile of street
Formula:
Expenditures for repair and maintenance
of streets (constant dollars)
miles of streets
Streets Maintenance
$25.000
$20.000
$15,000
$10,000
$5,000
$0
FY96 FY97 FY98
_Street expenditures per mile
t==JConstant1996 dollars expenditures per mile
-5 year trend (constant dollars)
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Street maintenance $3,782,000 $6,267,000 $3,941,000 $1,422,000 $3,084,000
Irniles of streets (paved and unpaved) 313 313 315 315 315
Street expenditures per mile $12,083 $20,022 $12,511 $4,514 $9,790
~onsumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars expenditures per mile $12,083 $19,572 $12,041 $4,251 $8,957
Analvsis
The City's Public Services Department maintains 304 miles of paved and 10.5 miles of unpaved streets. This
maintenance effort reflects decreasing expenditures per square foot during the period analyzed, a negative trend. The
unusually high level of expenditures in fiscal year 97 are due the Highland Avenue Widening project, a major
improvement that incurred $2.8 million of expenditures that year.
49
MAINTENANCE EFFORT
INDICATOR 25
Sidewalks
Sidewalk Maintenance
5100,000
Clearwater's Trend: Positive
$500,000
5400,000
Warning Trend:
Decreasing maintenance expenditures (constant
dollars)
5300,000
$200,000
Formula:
Sidewalk maintenance expenditures
Consumer Price Index
so
FY96 FY97
FY98 FY99
E::::=I Constant 1996 dollars
FYoo
_Sidewalk maintenance
-5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Sidewalk maintenance $313,000 $362,000 $477,000 $501,000 $288,000
Consumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars $313,000 $353,861 $459,095 $471,751 $263,495
Analvsis
The five year trend for sidewalk expenditures reflects a level funding effort for the period analyzed. This is a positive
trend and indicates that the maintenance effort has remained constant. The year to year fluctuations level out over the five
year period.
50
MAINTENANCE EFFORT
INDICATOR 25
Storm Sewers
Clearwater's Trend: Negative
Storm Sewer Maintenance
Formula:
Expenditures for repair and maintenance
of storm sewers (constant dollars)
miles of sewers
$10.000
$8.000
$6.000
$4.000
$2,000
$0
Warning Trend:
Declining constant dollar expenditures for
maintenance per mile of storm sewer
FY96 FY97 FY98 FY99
_Stann sewer expenditures per mile
~Constant 1996 dollars expenditures per mile
-5 year trend (constant dollars)
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Storm sewer maintenance $1,100,000 $322,000 $596,000 $266,000 $79,000
lmiles of storm sewers 120 120 121 123 123
Storm sewer expenditures per mile $9,167 $2,683 $4,926 $2,163 $642
~onsumer price index 100.0 102.3 103.9 106.2 109.3
Constant 1996 dollars exoenditures oer mile $9,167 $2,623 $4,741 $2,036 $588
Analvsis
The City maintains 123 miles of storm sewer mains. In addition ditches, manholes, catch basins, and all other drainage
structures are included in this maintenance effort to help eliminate flooding of streets and homes and assure compliance
with Federal, State and County stormwater runoff requirements.
The Storm Sewer maintenance effort reflects decreasing expenditures per mile during the period analyzed, a negative
trend. Fiscal year 1996 maintenance expenditures were unusually high due to several large projects, some of which were
gunnite restoration, slip lining and major repairs along Myrtle Avenue. A 33% rate increase was effective October 1, 1998,
and rate increases of 4.3% were enacted effective October 1, 1999 and 2000. Additional 4.3% rate increases are proposed
for the next two years. The increased revenues should enable the fund to spend more on maintenance in future years.
51
CAPITAL OUTLAY
INDICA TOR 26
Clearwater's Trend: Positive
Warning Trend:
A three or more year decline in capital outlay from
operating funds as a percentage of net operating
expenditures
Formula:
Capital outlav from operating funds
Net operating expenditures
I C Capital outlay as a percentage of operating axpenditures I
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Total capital outlay General and Special Revenue Funds 668,000 1,026,000 1,116,000 1,086,000 1,870,000
Net operating expenditures 66,122,000 72,719,000 74,765,000 78,305,000 79,869,000
Capital outlay as a percentage of operating
expenditures 1.01 % 1.41% 1.49% 1.39% 2.34%
Backe:round
Expenditures for operating equipment such as personal computers, furniture and vehicles that are drawn from the operating
budget are usually referred to as "capital outlay". This normally includes equipment that will last longer than one year and
that has an initial cost above a significant minimum amount, such as five hundred dollars. Capital outlay does not include
capital budget expenditures for construction of infrastructure such as streets, buildings or water mains.
The purpose of capital outlay in the operating expenditures is to replace worn equipment or to add new equipment. The ratio
of capital outlay to net operating expenditures is a rough indicator of whether the stock of equipment is being adequately
replaced. Over a number of years, the relationship between capital outlay and operating expenditures is likely to remain
about the same. If this ratio declines in the short run (one tothree years), it may mean that the local government's needs are
temporarily satisfied, since most equipment lasts more than one year. A decline persisting over three or more years can
indicate that capital outlay needs are being deferred, which can result in the use of inefficient or obsolete equipment.
Analvsis
For the purpose of this analysis, total capital outlay includes all the capital expenditures of the Special Revenue Funds plus
all the capital expenditures of the General Fund except the transfers to the Capital Improvement Program. Capital outlay
items include equipment with an initial cost above five hundred dollars that will last longer than one year. Also included are
all General Fund contributions to the fleet (additional motorized equipment).
The City's trend over the five years analyzed is positive. The level of expenditures as a percent of net operating expenditures
is fairly constant with a significant increase in fiscal year 2000.
52
DEPRECIATION EXPENSE
INDICATOR 27
Depreciation Expense
Clearwater's Trend: Positive
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Warning Trend:
Decreasing depreciation expense as a percentage
of total depreciable fixed assets (at cost) for
enterprise funds and internal service funds
Formula:
Deoreciation exoense
Cost of depreciable fixed assets
FY96 FY97 FY98 FY99 FYoo
t::::::J Enterprise depreciation expense as a percentage of total depreciable fixed
assets
_Internal Svcs depreciation expense as a percentage of total depreciable fixed
assets
-Enterprise - 5 year trend
-Internal Services - 5 year trend
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Enterprise depreciation expense 6,802,000 7,486,000 7,955,000 8,375,000 8,541,000
Enterprise cost of deoreciable fixed assets 285,075,000 300,500,000 311,879,000 322,301,000 333,824,000
Enterprise depreciation expense as a
percentae:e of total depreciable fixed assets 2.39% 2.49% 2.55% 2.60% 2.56%
nternal Services depreciation expense 2,899,000 3,371,000 3,842,000 3,845,000 3,649,000
Internal Svcs cost of deoreciable fixed assets 36,477,000 39,614,000 42,574,000 44,409,000 45,460,000
nternal Svcs depreciation expense as a
percenta2e of total depreciable fixed assets 7.95% 8.51% 9.02% 8.66% 8.03%
Backe:round
Depreciation is the mechanism by which the cost of a fixed asset is amortized over its estimated useful life. Historically,
depreciation has been recorded only in enterprise and internal service funds. Total depreciation cost is generally a stable
proportion of the cost of fixed assets, because older assets that have been fully depreciated are removed from service and
replaced by newer assets.
If depreciation costs are declining as a proportion of fixed asset costs, the assets on hand are probably being used beyond
their estimated useful life. This can result in inefficiencies and higher maintenance costs. If the ratio is declining because
obsolete assets are not being replaced, it may indicate that the enterprise or internal service funds lack the resources to
remain solvent.
Other things that can cause a decline in the ratio of expenses to cost of assets are underestimating the original useful life
of assets, or reducing the scale of an enterprise or internal service operation.
Analvsis
The City of Clearwater has eight enterprise funds: Water & Sewer, Stormwater, Gas, Solid Waste, Recycling, Marine &
A viation, Parking, and Harborview Center. The four internal service funds are General Services, Administrative Services,
Garage, and Central Insurance. The City's Enterprise Funds reflect a nearly constant proportion of depreciation expenses
to fixed asset costs over the five years analyzed, a positive trend. The Internal Service Funds also reflect a positive trend
of nearly constant proportion. The trends imply that assets are being replaced on a regular basis, and not being kept
bevond their expected useful life.
53
COMMUNITY NEEDS AND RESOURCES INDICATORS
The conununity's needs and resources indicators measure to some extent, the effects of the local
government's economic and demographic characteristics. This category deals with both sides of the same
issues and concerns. On one side, the local government's wealth is considered by its ability to generate
revenues through property taxes, user fees and other taxes. On the other side, are found the expectations and
demands of the conununity's residents for services relating to public safety, capital improvements and social
servIces.
The changes that affect the conununity's needs and resources are intertwined in a cause and effect
relationship. For example, as the conununity's employment base expands so will the need for housing, thus
increasing the value of the housing market and the property tax revenues. The additional housing will also
increase the need for utility and recreational services, and increase the costs of the local government's
operations for delivering those services. If economic conditions and population decline, the government's
costs for delivering services will decrease, but revenues will probably decrease more quickly than costs due
to the fIxed costs built into the operations.
Conununity needs and resources are difficult to translate into indicators, as the information needed is not
easily obtained. The indictors utilized in this section are those for which the data was reasonably accessible.
In order to accurately assess the conununity's needs and resources one must consider the composition
regarding population and income, employment base, and conunercial activity. This document looks at the
number of residents, their median age, income per capita, and the percent of households below the poverty
level. To assess the economic strength of the conununity, residential and conunercial development are
examined along with the unemployment rate for the area.
An analysis of conununity needs and resources may identify:
. A rise or decline in the tax base as measured by population, property values, employment or
business activity;
. A need to shift spending priorities due to changes in the demographic composition of the
conununity;
. A need to revise current public policies, as they may no longer be applicable or effective due
to changes in the economic conditions.
City of Clearwater Results
The analysis of the City of Clearwater's conununity needs and resources indicators reveals a population that
is increasing slowly, and getting older. The population indicator is positive, and points to the City's ability
to generate additional income. The increasing median age is marginal, pointing to the possible need for
additional city services to meet specialized senior needs and reduced revenues due to the tendency of older
persons to spend less than younger citizens. Older citizens also usually qualify for more tax exemptions and
reduced user charges.
The economic and employment indicators also reflect a mixture of trends. Increasing personal income per
capita and decreasing unemployment are positive trends. However, an increasing percentage of households
falling below the poverty level provides reason for concern.
The level of business activity as measured by new conunercial construction is positive because of a big
increase in 2000. Increasing property values are a positive trend that is yielding increased revenues from
property taxes. The rate of new conunercial development is outpacing new residential development with
residential providing a decreasing proportion of total new construction. These three are positive indicators
of a healthy local economy that can be expected to generate increased revenues.
54
POPULATION
INDICATOR 28
Clearwater's Trend: Positive
Population
Formula:
Population
110,000
100,000
90,000
80,000
70,000
80.000
50,000
40,000
30,000
20,000
10,000
o
Warning Trend:
Rapid change in population
FY96 FY97 FY98 FY99
I K:::::::J Population -5 year trend I
FYOO
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Population 101,867 102,472 102,874 104,281 104,454
Backe:round
The exact relationship between population change and other economic and demographic factors is uncertain.
Population change can directly affect government revenues since many intergovernmental revenues and grants are
distributed according to population. A sudden increase in population can create immediate pressures for new
capital outlay and higher levels of service.
A decline in population would, at ftrst glance, appear to relieve the pressure for expenditures, because the
population requiring services is smaller. But in practice, a local government faced with population decline is
rarely able to make reductions in expenditures that are proportional to the population loss. Many costs, such as
debt service and governmental mandates are ftxed and cannot be reduced in the short term. If the out-migration is
composed of middle and upper income households, those remaining in the community are likely to be the poor and
aged, who depend the most on government services. The interrelationship of population levels and other economic
and demographic factors tends to give population decline a cumulative negative effect on revenues. The greater
the decline, the more adverse the effects on employment, income, housing, and business activity.
Analvsis
The City of Clearwater population reflects a slow, steady increase over the ftve year period. The lack of rapid
change in either direction is a positive trend.
55
MEDIAN AGE
INDICATOR 29
Clearwater's Trend: Marginal
Median Age
Formula:
Median age of population
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Warning Trend:
Increasing median age of population
1996 19117 1998 1999 2000
I c=:JMedian age of population -5 year trend I
Fiscal Year: 1996 1997 1998 1999 2000
School enrollment 11,960 15,264 13,714 14,551 15,978
Median ae:e of population 42.1 43.3 43.6 43.9 44.2
Backe:round
The relationship between the population's median age and other economic and demographic factors is not clear.
An aging population and an increase in the number of senior citizens can hurt both the revenue and expenditure
profiles of a local government. Revenues may be affected because the income of senior citizens is often in the
form of social security and pension payments which may not change at the same rate as the general economy.
Also senior citizens often have full or partial exemption from property taxes and user charges. Expenditures for
government services may increase as the proportion of senior citizens increases because older citizens often
require specialized programs, especially in the areas of health, welfare, and transportation.
As younger age groups leave a community or decrease as a percentage of population, business activity can
decrease in greater proportion, especially if most of the people leaving are between twenty-five and forty years
of age. People in this age group usually spend more of their income than those in any other age group. If this
age group leaves, the community also loses a significant portion of its labor force, which can further damage the
local economy. If, however, the increase in median age is caused by a drop in the number of families with
young children, this can have a favorable effect on expenditures because it reduces the needs for schools,
recreation, and related programs.
Analvsis
The City of Clearwater population is getting older over the period analyzed. The trend is marginal. Although it
reflects a slow, steady increase in median age over the five year period, the median age remains lower than the
documented 45.3 years it was in 1985 (per the September 1994 Evaluation of Fiscal Condition and Financial
Indicators document). A look at the level of school enrollment over the same period reveals a significant
increase in the number of school age children, a further indication that the trend is toward the need for increased
government services, specifically for recreation type services. However, the growth in school enrollment is
also an indication that there has been no significant out-migration of young families with children.
56
PERSONAL INCOME PER CAPITA
INDICATOR 30
Clearwater's Trend: Positive
Personal Income per Capita
Formula:
Personal income oer caoita
Consumer price index
35,000
30,000
25,000
20,000
15,000
10,000
5,000
o
Warning Trend:
Decline in the level, or growth rate, of personal
income per capita (constant dollars)
FY96 FY97 FY98 FY99 FYOO
_ Personal Income per capita
l:::::J Personal income per capita (constant dollars)
-5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Personal income per caoita 24,696 26,050 27,311 28,367 30,633
Consumer orice index 100 102.3 103.9 106.2 109.3
Personal income per caoita (constant dollars) $24,696 $25,464 $26,286 $26,711 $28,027
Backe:round
Personal income per capita is one measure of a community's ability to pay taxes: the higher the per capita income, the
more property tax, sales tax, income tax, and business tax the community can generate. If income is evenly
distributed, a higher per capita income will usually mean a lower dependency on government services. Credit rating
ftrms use per capita income as an important measure of a local government's ability to repay debt. They compare per
capita income with per capita government expenditures to determine whether growth in income is keeping pace with
growth in expenditures. If not, a community's tax burden is increasing, which may contribute to a future inability to
meet fmancial obligations.
A decline in per capita income causes a drop in consumer purchasing power and can indicate that business, especially
in the retail sector, will have a decline that can ripple through the rest of the local economy.
Changes in personal income are especially important for communities that have little commercial or industrial tax
base, because personal income is the primary source from which taxes can be paid. In communities with a large
commercial and industrial base, personal income is less important.
Distribution of income can also affect the tax base. Two communities with the same per capita income may have
different income patterns. One may have a small number of extremely high-income households and a large number of
low-income households. Another may be composed entirely of middle-income households. The fITst may have
problems associated with the large number oflow-income households; the second may have fewer problems and a
healthy economy.
Analvsis
The per capita income used here comes from the University of Florida Bureau of Economic Business Research,
Florida Statistical Abstract. This indicator reflects the per capita income of Pin ell as County since city speciftc income
information is not available. The countywide per capita income is increasing over the ftve year period analyzed, a
positive trend.
57
POVERTY HOUSEHOLDS
INDICATOR3!
Clearwater's Trend: Negative
Poverty Households
5.0%
15.0%
Warning Trend:
Increasing proportion of poverty households or public 10.0%
assistance recipients
Formula:
Poverty households or public assistance recipients
Households in thousands
0.0%
FY90
FY93
FY95
I_ % of households below poverty level 1
Fiscal Year: * FY90 FY93 FY95
% of households below povertVlevel 7.6% 12.8% 12.9%
· 1990 census data = 2,024,000 poverty households/26,473,000 residential households = 7.6%
Backl!round
An increase in the proportion of poverty households or public assistance recipients can signal a future increase in the
level and unit cost of some services, because low-income households have relatively higher needs and a relative lack
of personal wealth.
Analvsis
There is only limited information available for this indicator. All data is for Pinellas County, which is the most local
unit examined by the published sources. Census information statistics are the source of the data for 1990, but nothing
is yet available for 2000. The data for 1993 and 1995 comes from the University of Florida Bureau of Economic
Business Research, Florida Statistical Abstract. This is the most current information available, and there are no
statistics available for years 1991, 1992, and 1994, or any year after 1995.
The available information reflects a negative trend of an increasing percentage of households falling below the poverty
threshold as of 1995.
58
PROPERTY VALUE
INDICATOR 32
Clearwater's Trend: Positive
Change in Property Value
Formula:
Chanl!e in propertv value (constant dollars)
Prior year property value (constant dollars)
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
-2.0%
Warning Trend:
Declining growth or drop in the assessed value
of residential, commercial, or industrial property
(constant dollars)
FY96
FY97
FY98
FY99
FYOO
I ~ Percent change in taxable value (constant dollars) -five year trend I
iscal Year: * FY96 FY97 FY98 FY99 FYOO
axable value 4,252,432,849 4,376,559,048 4,494,262,759 4,692,398,894 4,903,478,863
Consumer price index 100.0 102.3 103.9 106.2 109.3
rraxable value (constant dollarS) 4,252,432,849 4,278,161,337 4,325,565,697 4,418,454,702 4,486,256,965
rraxable value prior year (constant dollars) 4,311,130,598 4,252,432,849 4,278,161,337 4,325,565,697 4,418,454,702
!percent change in taxable value (constant
~ollars) -1.4% 0.6% 1.1% 2.1% 1.5%
· fiscal year 95 taxable value = 4,186,107,811
fiscal year 95 consumer price index = 97.1
Backe:round
Changes in property value are important because most local governments depend on the property tax for a substantial portion of
their revenues. Especially in a community with a stable or fixed tax rate, the higher the aggregate property value, the higher the
revenues. Communities experiencing population and economic growth are likely to experience short-run, per unit increases in
property value. This is because in the short run, the housing supply is fixed and the increase in demand created by growth will
force prices up. Declining areas are more likely to see a decrease in the market value of properties.
The effect of declining property value on governmental revenues depends on the government's reliance on property taxes. The
extent to which the decline will ripple through the community's economy, affecting other revenues such as sales tax, is more
difficult to determine. All of the economic and demographic factors are closely related. A decline in property value will most
probably not be a cause but a symptom of other, underlying problems.
Analvsis
Since Property Taxes are the single largest revenue source for the General and Special Revenue Funds, property values have a
significant effect on the City of Clearwater's financial position. The value of taxable property in the City has been increasing
during the five years analyzed. Taxable property is the total assessed value of property within the City less any property that is
exempt from property taxes. The rate of change has fluctuated, but has reflected an increase in four of the years. It slowed
somewhat in 2000. The trend is positive, and indicates that the increased focus on economic development and redevelopment in
the City of Clearwater is beginning to yield results.
59
RESIDENTIAL DEVELOPMENT
INDICATOR 33
Clearwater's Trend: Positive
Residential Development
70.0%
60.0%
Warning Trend: 50.0%
Increasing value of residential development as a 40.0%
percentage of value of total development 30.0%
Formula:
Value of new residential development
Value of total new development
20.0%
10.0%
0.0%
FY96
FY97
FY98
FY99
FYOO
c:::=J Cost of residential development as a percentage of total development
-5 year trend
New Development
50.000.000
. Cost of new miscellaneous development
C Cost of new commercial development
C Cost of new residential development
250.000.000
200.000,000
150.000.000
100.000.000
FYse
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Cost of new residential development 26,854,000 75,998,000 47,046,000 95,713,000 30,815,000
Cost of new commercial development 42,360,000 49,386,000 54,732,000 48,849,000 176,010,000
Cost of new miscellaneous development 24,898,000 27,352,000 17,820,000 7,507,000 230,000
Cost of total development 94,112,000 152,736,000 119,598,000 152,069,000 207,055,000
Cost of residential development as a
percentage of total development 28.5% 49.8% 39.3% 62.9% 14.9%
Backe:round
The net cost of serving residential development is generally higher than the net cost of serving commercial or industrial
development. This is because residential development usually creates more expenditure demands than new revenues.
According to an old planning adage, residential development creates expenditure drains, industrial development creates
revenue surpluses and commercial development pays for itself. Many local governments are now trying to obtain additional
revenues from residential development using means such as impact fees and charges to developers. The ideal condition
would be to have sufficient industrial development to more than offset the cost of residential development.
60
RESIDENTIAL DEVELOPMENT
INDICATOR 33
Back2round continued
However, there are wide variations in the expenditure demands of new residences. A high density residential area occupied
by middle-aged, wealthy families who are heavy consumers and look to the government for few services can generate more
revenues than related services costs. Houses built on the outer fringes of a community can impose far greater initial costs on
a local government than houses built within already developed areas. This is because the government must provide streets,
sewer lines and water mains to service the new development.
Analvsis
The City of Clearwater is a mature, fully developed community. There is very little undeveloped land available. Therefore,
most development takes the form of redevelopment where city streets already exist but water and sewer lines may be
needed. This indicator uses the value of permits issued for Residential, Commercial and Miscellaneous Other construction
projects to measure the proportion of each type to the total amount of new construction permitted in a given fiscal year.
Over the five years analyzed, commercial construction has exceeded residential construction, and the trend is toward a
decreased proportion of residential construction. This is a positive trend.
61
EMPLOYMENT BASE
INDICATOR 34
Clearwater's Trend: Positive
Local Unemployment Rate
Warning Trend:
Increasing rate of local unemployment or a
decline in the number of jobs within the
community
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Formula:
Local unemployment rate and/or the number of
jobs within the community
FY96
FY97
FY98
FY99
FYOO
I c:::J Local unemployment rate -5 year trend I
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Local unemDlovment rate 4.2% 3.7% 2.9% 3.0% 2.7%
Back2round
The unemployment rate and the number of jobs within a community are closely related. For the purpose of this
analysis they will be referred to as the employment base. Changes in the unemployment rate are related to changes in
personal income, and are thus a measure of, and an influence on, the community's ability to support its business sector.
If the employment base is growing, if it is sufficiently diverse to provide a cushion against short-run economic
fluctuations or downturns in one sector, and if it provides sufficient income to support the local business community,
then it will have a positive influence on the local government's fmancial condition. A decline in the employment base,
as measured by unemployment rate, can be an early sign that overall economic activity is declining and that
government revenues may be declining also.
Analvsis
The unemployment rate used for this analysis is for the TampalSt. Petersburg metropolitan area, and is provided by the
Florida Bureau of Labor Market Information. This data reflects a positive trend of decreasing unemployment over the
five years analyzed. This is in line with the strong national economy over the same period.
62
BUSINESS ACTIVITY
INDICATOR 35
Clearwater's Trend: Positive
Millions $
200
180
160
140
120
100
80
60
40
20
o
Business Activity
Warning Trend:
Decline in business activity as measured by retail
sales, number of business units, gross business
receipts, number of acres devoted to business, and
market or assessed value of business property
(constant dollars where appropriate)
FY96
FY97
FY98
FY99
FYoo
Formula:
New Commercial Construction
_Assessed value of new commercial construction in millions (constant dollars)
I:::::JAssessed value of new commercial construction in millions (constant dollars)
-5 year trend (constant dollars)
Fiscal Year: FY96 FY97 FY98 FY99 FYOO
Assessed value of new commercial construction
in millions (constant dollars) 42.360 49.386 54.732 48.849 176.010
Consumer price index 100.0 102.3 103.9 106.2 109.3
Assessed value of new commercial construction
'n millions (constant dollars) 42.360 48.276 52.678 45.997 161.034
Backeround
The level of business activity affects a local government's [mandaI condition in two ways. First. it directly affects any
revenues that are a product of business activity, such as those from sales taxes. Second, it has indirect influences. A change in
business activity affects demographic and economic areas such as personal income, property value, and the employment base.
Analvsis
The measure for business activity used in this document is the value of permits issued for new commercial construction for
each fiscal year analyzed. The trend in constant dollars is virtually level for the first four years analyzed. There is a large
increase in fiscal year 2000. Some of the largest projects permitted in 2000 were the Church of Scientology building on Ft.
Harrison valued at $27 million, the Mandalay Beach Club valued at $19 million, JMC Communities of Clearwater on Gulf
Blvd. valued at $18 million, Lincare, Inc. on US 19 valued at $13 million, and Dillards on US 19 valued at $13 million. Over
the five year period analyzed, the trend is positive.
63
SELECTED BmLIOGRAPHY
City of Clearwater, City Manager, Office of Management and Budget. A nnn:-l 1
Oppr~ting ~nil r~pit~l HlIilg~t 1996-2001.
City of Clearwater, Finance Department. rIP Work p~ppr!i:, '-' 1 c; FlInil. 9/30/96,
9/30/97,9/30/98,9/30/99.
City of Clearwater, Finance Department. A lIi1it Work p~ppr!i:, (tpnpr~ 1 FlInil 01 0,
9/30/96, 9/30/97, 9/30/98, 9/30/99, 9/30/00.
City of Clearwater, Finance Department. romprphpn!i:ivp A nnll~ 1 Fin~nr.i~ 1
RppoTt 1995-1999.
City of Clearwater, Finance Department. romprphpn!i:ivp Annll~l Fin~nr.i~l RppOTt
nr~ft, I~nll~ry ?OOO, 9/30/00.
International
City/County Management Association.
ronilition A H~nilhook for
,
Washington, D. C. : International
Association. 1994.
Fv~ 111~ting Fin~nr.i~ 1
I or.~ 1 (tovprnmpnt
City Management
University of Florida, Bureau of Economic and Business Research. Floriil~
St~ti!i:tir.~l Ah!i:tr~r.t. 1995, 1996, 1997, 1998, 1999.
U.S. Department of Commerce, Economics and Statistics Administration, Bureau
of the Census. 1 ggO rpn!i:lI!i: of Porlll~tion ~nil HOll!i:ine:
SlImm~ry Poplll~tion ~nil HOll!i:ing rh~r~r.tpri!i:tir.!i:, TTnitpil
St~tP!i: 1991.
64
INDEX
Accumulated Employee Leave.......................................................................................... 38
Bibliography................................................................................ ................................ 64
Budgeted Municipal Employees......................................................................................... 18
Buildings Maintenance Effort............................................................................................ 48
Business Activity........................................................................................................... 63
Capital Assets .............................................................................................................. 39
Capital Outlay.............................................................................................................. 52
Capital Plant Indicators............................................................ ....................................... 39
Community Needs and Resources Indicators ......................................................................... 54
Compensated Absences......................................... ................... ....................................... 38
Consumer Price Index ...................................................................................................... 4
Current Liabilities ......................................................................................................... 31
Debt Indicators........................................................................... . . .. . . .. .. . .. . . .. .. . .. .. . .. . . .. ... 30
Debt Service ................................................................................................................ 33
Depreciation Expense............................................. ..... ................... ................................ 53
Elastic Revenues............................................. . .. .. .. . .. . . . . . . . . . .. .. . . .. . . .. . .. . .. . . .. . .. . . .. .. .. . . .. .. . .. . . . 9
Employee Benefits, Non-salary......................................................................................... 20
Employees Per One Thousand Residents.............................................................................. 18
Employment Base............................................. . . . .. .. . .. .. . .. . . . .. . . . . . . . . . . . . .. . .. . .. . . . . . .. . . . .. .. . . . .... 62
Enterprise Operating Results............................................................................................. 23
Equipment Maintenance Effort.......................................................................................... 46
Executive Summary and Overview....................................................................................... 3
Expenditures Indicators..... .................................................................. ............................ 16
Expenditures Per Capita .. . . .. . .. . .. .. . . . .. .. .. . . . .. . . . . . . . . . .. . . .. . .. . . . .. . .. . . . . . . . . . . .. . . . . .. . .. . . . . . . . .. . .. .. .. .. . . . .. 17
Fixed Costs ................................................................................................................. 18
Fleet Equipment Maintenance Effort................................................................................... 46
Fringe Benefits....................................................................... . . . . . . .. . .. .. . .. . . . . . .. . . . .. . . .. . .. . .. 20
Garage Units of Equipment Maintenance Effort..................................................................... 46
Gas Mains Maintenance Effort.......................................................................................... 42
Gas Enterprise Operating Results....................................................................................... 24
General Fund Operating Surplus........................................................................................ 22
Harborview Center Maintenance Effort ............................................................................... 44
Harborview Center Operating Results ................................................................................. 27
Index ..................................................................................................................... 65
Intergovernmental Revenues............................................................................................... 8
Introduction to Evaluating Financial Condition ....................................................................... 1
Liquidity. .. . .. .. . .. . .. . .. . .. .. .. .. . . . . .. .. . .. . . .. .. . .. .. . .. .. .. . .. . .. . . . . . . . . . . . . .. . .. . .. . . .. . .. . .. . .. . .. . . . . .. .. . .. . . .. .. ... 29
Long-Term Debt........................................................ ................................................... 32
Maintenance Effort .. .. . .. . .. .. .. . .. . .. .. . . . .. .. . . .. . .. . .. .. .. .. . . .. . . . . . . .. . . . . . . . .. . . . . . . .. . .. .. . .. . .. . .. . .. . .. .. .. . . .. .. 40
Marina Enterprise Operating Results................................................................................... 25
Marina Maintenance Effort .............................................................................................. 45
65
INDEX
Median Age................................................................................................................. 56
Millage Rate.................................................................................................................. 6
Net Operating Expenditures ............................................................................................. 17
Net Operating Revenues.................................................................................................... 6
Non-salary Employee Benefits .......................................................................................... 20
One-Time Revenues................................................ . . . . . . .. . . . .. . .. . .. . .. . .. . .. . .. .. . .. . .. .. .. . .. .. .. .. ... 11
Operating Deficits ......................................................................................................... 21
Operating Position Indicators..................................... . . . . . . .. . . . .. . . . . . . .. . . .. . .. . .. .. . .. . . . .. . . ~ .. .. . . . . ... 21
Operating Surplus. General Fund.......... ............................................................................. 22
Overlapping Debt................................................... . . . . . . . . .. . .. . . . .. . . . . . .. . . . . .. .. . .. . . . .. .. .. . .. . .. .... 34
Parking System Enterprise Operating Results ........................................................................ 25
Pension Assets.............................................................................................................. 37
Personal Income Per Capita ............................................................................................. 57
Population. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 55
Poverty Households....................................................................................................... 58
Property Tax Revenues................................................................................................... 12
Property Value.................................................. . . . . . . . . . . .. . . . . . . .. .. . .. . . .. . .. . . . .. . . . . . . .. .. . . . . . . . . .... 59
Recycling Enterprise Operating Results............................................................................... 26
Recycling Maintenance Effort.................................. . . . . . . . . . . . . . . .. .. . .. . . . . . . . . . . .. .. .. . . .. .. .. . . . .. . .. .... 47
Residential Developrnent ........................................ . . . . . . . . . . . . . . .. . . . .. . .. . .. . . . . .. .. . .. . .. .. .. . .. .. . .. . . .. 60
Restricted Revenues........................................................................................................ 7
Revenue Shortfalls/Surpluses............................................................................................ 15
Revenues Indicators ........................................................................................................ 5
Revenues Per Capita ....................................................................................................... 6
Sidewalks Maintenance Effort........................................................................................... 50
Solid Waste Enterprise Operating Results ... .. .. . . . . . .. .. . . . . . . . . . . . . . .. . . . . .. .. . .. . .. . .. . . . . .. .. . .. . .. .. . . .. . .. . .. ... 24
Solid Waste Maintenance Effort ........................................................................................ 43
Storm Sewers Maintenance Effort ..... .. .. .. .. . . . . .. .. . .. . . .. . .. . .. . . . .. .. . . . .. . . . . .. . .. . .. . .. .. . .. . .. .. . .. .. . . . . .. .... 51
Stormwater Utility Enterprise Operating Results..................................................................... 26
Streets Maintenance Effort............................................................................................... 49
Summary and Overview.................................................................................................... 3
Surplus Revenues.......................................................................................................... 15
Uncollected Property Taxes................. ............................................................................. 13
Undesignated General Fund Balance................................................................................... 28
Unemployment Rate....................................................................................................... 62
Unfunded Liability Indicators ........................................................................................... 35
Unfunded Pension Liability .............................................................................................. 36
Unrestricted General Fund Balance (see Undesignated General Fund Balance) ................................ 28
User Charge Coverage.................................................................................................... 14
Water and Sewer Enterprise Operating Results ...................................................................... 23
Water and Sewer Mains Maintenance Effort ......................................................................... 41
66