Complete Document - City of Auburn

City of AuburnFinancial Overviewyears.” The City’s “double A” rating wasconfirmed by Moody’s in May of 2002.Standard & Poor’s upgraded the City’s ratingto AA- in February 2002 and the upgrade wasconfirmed in May 2002. For more informationon trends in the General Fund’s balance,please see the Overview of Fund BalanceTrends in Section 3, General Fund.For the FutureThe City’s solid financial position and trackrecord for sound budgetary practices andconservative debt policy bode well for thefuture. While there are no plans for specificrevenue increases, there are expensepressures in both the General and Sewerfunds that could result in the need foradditional revenue at some time in theforeseeable future.The School Board requested supplementalGeneral Fund appropriations in FY 00through FY 02. Although no supplementalappropriations have been budgeted for FY 03and FY 04, the School Board anticipates thatwithout an overhaul of the State’s educationfunding mechanisms, there will be acontinuing need for supplemental fundingfrom the City. The Board and the City Councilare considering various alternatives toprovide a long-term solution for this need.As a result of the continuing residential andcommercial growth, one of the City’s twowastewater treatment plants was operating atnear 100% capacity, while the second plant’soperating level continued to increase. Late inFY 01, the City issued $24.74 million in debtto de-privatize the sewer treatment plants andexpand the capacity of the sewage collectionand treatment systems. This project iscurrently underway and completion isexpected in FY 04. Based on the sewerprojects included in the City’s six-year capitalimprovement plan, the need for anotherborrowing in FY 04 is anticipated.Aside from the circumstances describedabove, it appears that the General Fund’ssolid upward revenue trend will be adequateto finance the costs of providing qualityservices to an expanding population and citylimits. City management’s consistentmonitoring of both revenue and expenditurebudgetary performance will enable thegovernment to address changing conditionsand to make well-informed, well-plannedeconomic decisions.Recently, the Finance Department developeda simple economic model to project therevenues and expenditures for the GeneralFund. This simple model is based on thehistorical trends in revenues andexpenditures and uses the trend data as thebasis for projecting revenues, expendituresand fund balances for five or more years intothe future.Although very simple, the model also allowsthe projection of the effect on revenues,expenditures and fund balances of variousscenarios that may be proposed to theCouncil for consideration. This economicmodel is helpful for examining the longer-termimpacts of the need for revenue increases,the issuance of long-term debt, the initiationof new services or programs or the increasein financial support to the school system.The General Fund’s six-year trend data andthe model projecting the operating results inthe General Fund through FY 11 arepresented on the immediately followingpages.40