1. GMA Financial Condition Project
Nick Archer, Bright Agbo, Carmisha Primus, Breana James, Jamie Bond, Christopher Suggs, Anna McIntyre, Rebecca Sakyi

2. Various Methodologies
Dozens of different methodologies are available to employ
Financial Input Indicators
Total revenues or revenues per capita
Total or percentage of expenditures or expenditures per capita
Financial Results Indicators
Asset allocation efficiency
Indicators of earning and profitability
Financial Process Indicators
Liquidity
Net Position/ Change in Net Position
Fund Equity or Fund Operating Surplus
Borrowing Capacity

3. Various Methodologies
Fiscal Condition Indicators
Dozens of studies done, each using a different set of indicators
Table shows number of ratios used in just nine other studies
Notable studies not in table:
Municipal Finance Officers Association methodology uses 29 indicators
International City/County Management Association methodology uses 36 indicators
Finding the right combination of ratios/indicators is an art
No agreement on best practices for measuring financial health!
Our analysis uses the Wang (2007) approach

4. Example: Wang Approach to Financial Condition Analysis
Financial Condition can be found with a few measures:
Cash Solvency
Budgetary Solvency
Long-Run Solvency
Service Solvency

5. Ratios Cash Solvency Long-Run Solvency Budgetary Solvency
Service Solvency

6. Overview to the Project

7. Data Gathering: Currently: 57 cities & ratio experimentation
Gathered from CAFRs
Goal: to produce an annual report on the fiscal condition of Georgia municipalities

8. Categories for Data Gathering
Statement of Activities Information
Statement of Net Position
General Fund Revenues and Expenses
Debt analysis
Comparison to Budgets
Asset Additions
Fund Balances

9. Cities Analysis

10. Example Cities
Crawford
Oconee
Buford
Irwinton
Cornelia

11. Cities Showing Improvement
Cornelia
Crawford
Operating Ratio - Governmental
2016
1.43
2015
1.25
2014
1.30
Operating Ratio - Governmental
2016
1.03
2015
1.00
2014
.87
Operating Ratio - Enterprise
2016
1.00
2015
.69
2014
.59
Operating Ratio - Enterprise
2016
1.69
2015
1.63
2014
1.67

12. Cities with Indications of Decline
Oconee
Buford
Operating Ratio - Governmental
2016
.56
2015
.62
2014
.63
Operating Ratio - Governmental
2016
.53
2015
.44
2014
.56
Operating Ratio - Enterprise
2016
1.43
2015
1.39
2014
1.34
Operating Ratio - Enterprise
2016
.31
2015
.34
2014
.37

13. Net Position and Current Ratios
Oconee
Irwinton
Net Position - Governmental
2016
1.00
2015
2014
Current Ratio - Governmental
2016 39
2015 20
2014 63
Net Position - Enterprise
2016
.99
2015
2014
Current Ratio - Enterprise
2016 1
2015
2014

14. Cautions in the Use of Ratios
Ratios alone are not adequate to provide sufficient information from which to judge the overall performance of the city
Ratio analysis should be governed by common sense
Ratios are not calculated using the same definitions