Financial Performance Indicators of Concern

                             2019    2020    2021

_{Fund balance available for appropriation is an important reserve for local governments to provide cash flow during periods of declining revenues and to be used for emergencies and unforeseen expenditures. The information to the left indicates the amount of available cash on hand. You will also see the average for units of your size. Note that 8.33% represents enough fund balance to cover one month of expenditures. Normally, a unit has to either increase revenues or decrease expenditures to increase fund balance available.}

_{This calculation looks at fund balance available plus debt service fund balance (if applicable) less Powell Bill. This number is them divided by the total of total expenditures plus transfers out less bond proceeds.}

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                             2019    2020    2021

_{It is not uncommon for a Water Sewer System with multiple performance indicators of concern to find that a proposed solution to one of the indicators also solves other performance indicators of concern.}

_{A Quick Ratio less than 1 indicates that the unit owes mores for its current bills than what it has on hand in unrestricted cash and investments plus what is owed from customers (accounts receivable). This could indicate that the fund may have difficulty paying its current bills. If this pattern continues, the water and/or sewer system may not be sustainable.}

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_{This calculation subtracts operating expenses (which also includes depreciation and debt principal paid) from operating revenues. A negative balance indicates that your rates are not covering your operating expenses.} 

_{This indicator calculates how many month's worth of expenses (including debt principal but not depreciation) a unit can pay based on the amount of unrestricted cash at year-end. The typical billing cycle is one month (8.33%) and one extra month usually gives a local government enough cash  to handle unusual monthly expenses (16.66%). This 16% would be the bare minimum necessary to keep the fund from experiencing cash flow issues.}

_{The rate structure of the Water Sewer fund should support the expenses of the Fund without operating subsidies or transfers from other funds.}

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_{A Quick Ratio less than 1 indicates that the unit owes mores for its current bills than what it has on hand in unrestricted cash and investments plus what is owed from customers (accounts receivable). This could indicate that the fund may have difficulty paying its current bills. If this pattern continues, the electric system may not be sustainable.}

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_{This calculation subtracts operating expenses (which also includes depreciation and debt principal paid) from operating revenues. A negative balance in this indicates that your rates are not covering your operating expenses.}

_{This indicator calculates how many month's worth of expenses (including debt principal but not depreciation) a unit can pay based on the amount of unrestricted cash at year-end. The typical billing cycle is one month (8.33%) and one extra month usually gives a local government enough cash  to handle unusual monthly expenses (16.66%). This 16% would be the bare minimum necessary to keep the fund from experiencing cash flow issues.}

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