CLIFTONLARSONALLEN FINANCIAL CHECKUP

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1 THE FINANCIAL CHECKUP CliftonLarsonAllen s Governmental Consulting Services Team has developed a Financial Checkup, a specialized tool to thoroughly examine important, financial and management indicators, to help officials identify and address major trends affecting their municipality. The Financial Checkup consists of a brief, understandable and affordable trend analysis of your municipality s current fiscal condition, providing a basis for the development of a strategy focused on financial and operational sustainability. The Financial Checkup utilizes eighteen (18) indicators covering areas such as revenues, expenditures, cash liquidity, and long term debt obligations as well as other key indicators to identify significant trends and red flags that may impede long term financial stability. The Financial Checkup is a quick, inexpensive analysis that becomes an invaluable tool for municipal officials during this precarious time. The CliftonLarsonAllen Governmental Consulting Services Team will review your municipality s financial data for five previous years, identify significant trends through the use of tables and graphs and compile a report that includes findings and recommendations for each of the following indicators: INDICATOR # 1: REVENUE & EXPENDITURE TREND ANALYSIS provides an overview analysis of total General Fund revenues and expenditures. INDICATOR # 2: REVENUE SOURCE ANALYSIS provides an analysis of General Fund revenue sources. INDICATOR #3: SALES TAX REVENUE ANALYSIS provides an overview of total sales tax revenue as well as sales tax revenue collected by the City's top ten vendors. INDICATOR #4: EXPENDITURE ANALYSIS provides an analysis of total General Fund spending by function. INDICATOR # 5: INTERGOVERNMENTAL REVENUE DEPENDENCY provides percentage trend information reflecting the City's reliance on revenues received from other governmental entities. INDICATOR # 6: ASSET SUFFICIENCY RATIO identifies whether the City's total cash and investments are adequate to cover its current obligations or amounts owed. 1

2 INDICATOR # 7: UNRESTRICTED FUND BALANCE RATIO The Government Finance Officers Association recommends, at a minimum, that general purpose governments, regardless of size, maintain an unrestricted fund balance in their General Fund of no less than 5% to 15% of regular General Fund operating revenues or General Fund operating expenditures. 2

3 INDICATOR # 8: REVENUE COVERAGE RATIO (Governmental Activities) This indicator demonstrates the City s abilities to cover governmental activities' expenditures with related program revenues and its reliance on general revenues to subsidize certain function/program expenditures. INDICATOR # 9: USER CHARGE COVERAGE RATIO demonstrates the City s abilities to cover business type activities' expenses with related program revenues and its reliance on general revenues to subsidize certain function/program expenses. 3

4 INDICATOR # 10: ASSESSED VALUE ANALYSIS indicates trends in the City's property values. INDICATOR #11: UNCOLLECTED PROPERTY TAXES RATIO illustrates the percentage trend of uncollected property taxes. INDICATOR # 12: POPULATION TREND ANALYSIS analyzes the City's population trends to identify possible financial impacts on the City. INDICATOR # 13: REVENUES PER CAPITA displays the relationship between the City's revenues and its population. INDICATOR # 14: EXPENDITURES PER CAPITA shows the relationship between the City's population and expenditures. INDICATOR # 15: FULL TIME EQUIVELANT EMPLOYEES PER CAPITA illustrates the relationship between the City's total number of full time equivalent employees compared to the City's total population. INDICATOR # 16: DEBT PER CAPITA measures the City's current long term debt amount allocated to each resident. INDICATOR # 17: LONG TERM DEBT SERVICE RATIO measures the City's flexibility to respond to economic changes by comparing debt service expenditures as a percentage of total expenditures. INDICATOR # 18: MAINTENANCE EFFORT RATIO indicates whether capital assets are being maintained at a sufficient level to insure their useful life. 4

5 Financial Checkup vs. an Audit The Financial Checkup is different from your annual audit. Your auditor primarily focuses on your previous year s financial statements to determine whether they materially conform with generally accepted accounting principles and evaluates internal controls. The Financial Checkup focuses on a multiple year, trend analysis which results in a forward looking report that can assist municipal officials in developing policies and strategies to ensure long term health and solvency. Why CliftonLarsonAllen? The CliftonLarsonAllen Governmental Consulting Services Team is comprised of a unique team of over 40 local government finance and management professionals, who will bring valuable experience and insight to your municipal team. Our public management staff has decades of direct management experience having served as city and county managers, deputy and assistant managers and department heads in governments such as Lakewood, Aurora, Dallas, Littleton, Englewood, La Plata County, Monte Vista, Bayfield, Federal Heights, Thornton, Fraser and Lakewood. Our managers currently provide outsourced management and consulting services to over 100 local governmental entities. Our Certified Public Accountants are focused exclusively on providing accounting and financial consulting to local governments and serve as outsourced finance directors and financial consultants to hundreds of Colorado local governments, including cities, towns and special districts. They are involved in the budgeting process from beginning to end, long term financial projections and forecasts, bond financing, compilation of interim financial statements, drafting of comprehensive financial annual reports (CAFRs) and the development of financial policies and procedures. In addition to our local experts, CliftonLarsonAllen, one of the nation's top 10 certified public accounting and consulting firms, has a staff of more than 3,600 professionals, operating from more than 90 offices across the country. This affords our local offices with additional resources should the need arise. Your Next Step Municipalities are entering into a new era of financial unknown. Municipal officials need solid information to successfully maneuver their communities into the next decade and beyond. The first step is a Financial Checkup with solid analysis and recommendations from our experienced, local government professionals. Upon receiving your municipality s Financial Checkup, our Governmental Consulting Services Team can assist you in implementing both short and long term recommendations and strategies. 5