HomeMy WebLinkAbout20210729083754TABLE OF CONTENTS
Executive Summary
City Indicators
MunicipalCost Index ..................................................................................................... I
EmploymentBase ........................................................................................................... 2
UnemploymentRate ....................................................................................................... 2
Total Effective Buying Income ........................................................................................ 3
Median Household effective Buying Income .................................................................... 4
EBIDistribution ............................................................................................................. 4
Population...................................................................................................................... 5
Households..................................................................................................................... 6
PropertyValue ............................................................................................................... 7
Value of New Development ............................................................................................ 8
Major Revenues
Net Operating Revenues Per Capita ................................................................................ 9
SalesTax ..................................................................................................................... 10
Sales Tax as a Percentage of Net Operating Revenue .................................................... I I
PropertyTax ................................................................................................................ 12
Property Tax as a Percentage of Net Operating Revenue ............................................... 13
Returnon Investment .................................................................................................... 14
Expenditures
General Fund Departmental Expenditures ..................................................................... 15
General Fund Unreserved- Undesignated Balance .......................................................... 16
Enterprise Funds Expenditures ...................................................................................... 17
Solid Waste and Landfill Expenditures .......................................................................... 18
Personnel...................................................................................................................... 19
CitizensPer Employee .................................................................................................. 19
Executive Sununary
The following report examines various trends that affect the City's financial health.
Economic and demographic factors, major revenues and expenditures are all plotted over
time to present a dynamic picture of the City's operations and environment. Most of the
indicators in this report are very positive for the City and the local economy.
We are growing. The City experienced record growth ( 80 million in new
development) in 1993, and it is still going. About 56% of new value is residential.
Taxable valuation turning up. 1994 was the third consecutive year of increasing
assessed valuation in College Station. This is significant after an essentially flat period
from 1986-199 1. In real terms(adj usted for inflation), 1993 is the first year to show an
increase since 1986, and we are still not back to that level.
More jobs ... Unemployment remains the lowest in the state, 3.8%. The job base grew
by 3,600 jobs in the county.
* More people ... 555 more households, about 1400 more people.
Moderate income growth... Effective Buying Income increased 5.7% in 1992,
median EBI is up 3.1%.
Strong revenue growth... Sales Tax increased 10.8% in 1993, Property Tax was up
8.2%. This is the first real increase for property tax since 1986. Overall net operating
revenues grew by over 15% in FY93. Revenue per capita increased even after
adjustment for inflation by 7.6%.
Expenditure growth has been within the bounds of revenue increases. In FY93
operating revenues exceeded operating expenditures by $5.17m. General Fund
departmental expenditures have grown at an average annual compound rate of 8.3%
since 1984.
CITY INDICATORS
MCI
The Municipal Cost Index (MCI) was developed by American City and County magazine. It
shows the effect of inflation on the costs of typical municipal services. It focuses on items that
make up the bulk of municipal expenditures, such as wages, materials and supplies, and services
provided by contractors. The MCI draws from the Consumer Price Index (CPI) to measure the
upward pressure expected in municipal wage rates. It draws cost information from the Producer
Price Index (PPI) for items usually purchased by local governments. MCI uses cost indexes
published by the United States Department of Commerce for construction costs.
The MCI is used in this report to adjust some fiscal measure for inflation. By adjusting for the
effect of inflation, the true flow of the expenditure or revenue is revealed. These adjusted measures
show the real pattern of growth or decline. -
The MCI has risen at a consistent and moderate rate in the past decade. Since 1984 inflation as
measured by the MCI has averaged just over 3% annually. Given the strong anti-inflation stance
of the current Federal Reserve members, inflation should remain under control in the near future.
Inflation continues at consistent and moderate rate.
140.00
120.00
100.00 -V
80.00
6000
40.00
20.00
0.00
1984
MUM
105.83
Hk
101.13� R
411
I
EMPLOYMENT BASE AND UNEMPLOYMENT RATE
Employment base is related directly to business activity and personal income. A change in the
number of jobs available in the community is a measure of, and an influence on, business activity.
Optimally, an employment base needs to be sufficiently diverse to provide a cushion against short -
run economic fluctuations and provide sufficient income to support the local business economy.
Brazos County had a record year in 1993 with the amount of jobs available. In 1993, there were
over 69,000 jobs available in Brazos County, an increase of more than 3,600 from 1992. A
majority of this increase came in the many retail and service related businesses that opened in
College Station. The high number of jobs available in Brazos County has directly effected the
unemployment rate. The unemployment rate in Brazos County is being estimated by the state to
be approximately 3.8 % for all of 1993. This is the lowest unemployment rate for the state.
0 Good job growth and low unemployment rate continue.
70-1/
60-Z 4�
0Z
40-
20-
10-/
0
1984
1985
EMPLOYMP
1986 1987 1988 1989 1990 1991
1992 1993
Oil
EFFECTIVE BUYING INCOME
Total Effective Buying Income
Sales and Marketing Management Magazine annually collects buying income figures for their
Survey of Buying Power. Total effective buying income (EBI) is the sum of disposable personal
income for citizens in College Station. Effective Buying Income takes out personal taxes, non -tax
payments (fines, fees, and penalties) and personal contributions for social insurance. This figure is
also known as disposable personal income.
Due to the time required to collect the information, there is about a one year lag between the time
income is actually earned and when EBI information is published. Therefore, the most recent EBI
figures are for 1992.
0 College Station's total EB1 increased 5.7%, or 29.6 million in 1992.
WARNING TREND:
INCOME
".166 E
U)
Z
0
Z
0
0
CONTINUAL DECREASE IN TOTAL EFFECTIVE BUYING
Median Household Effective Buying Income
Median household EBI is the point which bisects all the city effective buying income levels leaving
one-half of the city households above and one-half of the households below the median effective
buying income level.
0 Median EBI increased 3.1 % in 1992.
WARNING TREND: CONTINUAL DECREASE IN MEDIAN HOUSEHOLD EFFECTIVE
BUYING INCOME
1989 1990
The graph below illustrates income distribution in College Station. While most ranges appear
fairly constant, a positive trend is evident in the highest EBI range, This rise in the upper range is
offset by a decrease in $10,000-$19,999 range. Another positive sign is that the percentage of
households in the lowest range has leveled off.
more upper-incorne nousenoids.
WARNING TREND: CONTINUAL INCREASE IN PERCENTAGE OF HOUSEHOLDS IN
LOWER INCOME RANGES%
36.00%
30.00%
25,00%
20.00% - _+_
15.00%
10.00%
&00%
PERCENTAGE OF HOUSEHOLDS
IN EACH EBI RANGE
% < $10,000 EBI
% $10 TO $19.9 EBI
%M TO $34.9 EBI
% $35 TO $49 EBI
% > $50,000 EBI
ULM I I I I I I
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
4
POPULATION
The exact relationship between population change and other economic and demographic factors is
uncertain. Population change can however, directly affect government revenues and expenditures.
For this reason, it is important to track the population change for the City. The number for 1990
was obtained from census, and is very accurate since it was obtained by an actual physical count.
The numbers for other years are estimates obtained from the Texas State Data Center. The Data
Center is the clearing house for all types of statistical information for the state of Texas. The
population figures are given to the Data Center by the Commerce Department so these are the
official population estimates for College Station. The estimate for 1993 was made by the budget
division based on the number of new dwelling units and average occupancy figures.
Although it appears as if population growth is stagnant by looking at the graph, actually College
Station has experienced population growth well above national figures. From 1980 to 1990
College Station grew from 37,272 to 52,456 or 40.7%. Since 1990 population growth has
averaged 1.9% as compared to about 1% nationwide.
* Population growth outpaces national average.
WARNING TREND: CONTINUING DECLINE IN CITY'S POPULATION
nu
WE
40
z
CO ju
n
0
COLLEGE STATION
5
HOUSEHOLDS
A household consists of all people occupying a single housing unit and applies to the rules of the
1980 census -- such as a house, an apartment, a group of rooms, or a single room. The members
of a household need not be related. A single person living alone in a housing unit is also counted as
a household. All persons who are not members of households are regarded as living in group
quarters; institutions, dormitories, military barracks, etc.
The number of households in College Station has tended to increase almost every year. The lowest
number of households in the city was 15,500, in 1984.
The number of households in College Station increased by 555, or just over 3 % in 1993.
I
RIA
U 1984 1 1985 1 1986 1 1987 1988 1989 1990 1991 1992 1993
6
PROPERTY VALUE
Changes in property value are important because local governments tend to depend on property
tax for a substantial portion of their revenues. The effect of declining property value on
governmental revenues depends on the government's reliance on property taxes. A decline in
property value will most likely not be a cause but a symptom of other, underlying problems. For
this indicator, property value is the assessed and estimated actual value of taxable properties, both
real and personal.
College Station has experienced an increase in property value for the past three years. This is a
positive trend after experiencing no increase in taxable value in the period from 1986-1991. The
lower graph shows the trend in property value adjusted for inflation.
0 Upward trend continues.
WARNING TREND: DECLINING GROWTH OR A DROP IN THE VALUE OF REAL
AND PERSONAL PROPERTY
1,400- /
1,200-/
1,000-
.Z
ri) z 80041!;
cc: 0
0 600-��.'. - .
0 :11
1984
1985
1
1986
1
1987
1
1988
1
1989
IRVIN
1
1991
1
1992
1993
1994
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
VALUE OF NEW DEVELOPMENT
Total value of new development is the value of commercial and residential development as
measured by yearly building permit records. This indicator reveals the pattern of growth in the
community. High growth periods are associated with high rates of development. When growth
declines, development will decrease.
ding pe its were issued
New development in College Station increased significantly in 1993. Buil nn
for development valued at nearly $80 million. Another positive indicator is that the new
al Residential
development was balanced fairly well between commercial and residenti
development made up 56% of the total as compared to 73% in 1992.
Very strong building activity in 1993 ($80 Million).
WARNING TRENDS: LITTLE OR NO NEW DEVELOPMENT, OR INCREASING VALUE
OF RESIDENTIAL DEVELOPMENT AS A PERCENTAGE OF TOTAL DEVELOPMENT
Cf)
z
0
Z
U I
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
1 El COMMERCIAL 91 RESIDENTIAL I
1-i
NET OPERATING REVENUES PER CAPITA
The net operating revenue for the City was calculated by sununing all revenues (except transfers) for the
General, Utility, Solid Waste Collection, Landfill, Debt Service, Hotel/Motel, and Cemetery funds. This
number was then divided by population to obtain net operating revenue per capita. Additionally, electric
revenue was separated to facilitate comparison with other cities that do not provide that service.
The spike in revenues that occurs in 1988 is due to the fact that 1988 was a 15 fiscal period. In 1988 the
revenue number is made up of 15 months worth of data. The 15 months of data are reflected in all graphs
where the year 1988 has an asterisk (*) .
The lower graph presents the same information adjusted for inflation. In this graph since population and
inflationary effects are removed, the trend should be fairly flat. One reason that this graph might rise is if
a higher service level is provided by the City.
A continuing trend in either direction should be carefully analyzed. If revenues per capita keep rising
over time, this could mean that the City's capacity to generate more revenue is diminishing. If there is a
downward trend in this indicator, services provided may have to be cut to meet budget shortfalls.
Per capita revenues increase I I% in 1993.
WARNING TREND
1,200-/'
1,000-/
800-
0
(n
CC
0
a
0-M
1984
1,200 `
1,000-
800--
600-
400-'.
200
: A CONTINUING TREND IN EITHER DIRECTION.
1985 1986 1987
1984 1985 1986 1987
1988
1989 1990 1991
1992 1993
SALES TAX REVENUE
Sales tax revenue is highly responsive to changes in the economic base and the level of inflation.
As the economic base expands, or inflation goes up, sales tax revenues rise. The year to year
change in revenues is a good way to interpret the economic condition of the community.
Sales tax revenues continued the strong upward trend in 1993 increasing by 10.8%. Some reasons
for the large increase are the stronger economy and the growth in retail establishments in the city.
College Station is becoming more of a regional trade center attracting consumers from surrounding
areas.
The lower portion of the graph below shows the real growth of this revenue with the effect of
inflation removed. It is important to notice that there is still a strong upward trend. This indicates
that much of the growth is not due to rising prices, but rather to increased spending.
Sales tax revenue up 10.8% in 1993.
WARNING TREND: DECREASING SALES TAX REVENUES
8,000
7,000
6,000
51000
Z
(n Z
<
4,000
0
"000
2,1M -
1,000 -
0-
19B4 1985
15 MONTH YEW
1986 1987
RAI E INCREASF
I I 1 1
1988* 1989 1990 1991
S1
1�92 1993
IN
Sales Tax Revenue as a Percentage of Net Operating Revenues
This indicator shows what portion of net operating revenues come from the collection of sales tax.
In the most ideal case, this indicator would remain relatively constant. This indicator can be used
as a gauge for determining if property tax revenues are growing at the same rate as other city
revenues.
Sales tax revenue as a percentage of net operating revenues declined slightly in 1993. This leveling
off is positive in the sense that an increasing dependence on any single revenue source can lead to
problems if that revenue decreases. This is especially true with a revenue like sales tax that is very
sensitive to the economy.
Sales tax revenue levels off as a percentage of net operating revenues.
WARNING TREND: CONTINUOUS DECREASES OR INCREASES IN SALES TAX
REVENUES AS A PERCENTAGE OF NET OPERATING REVENUES
14.00% -
12.00%
10.00%
8.00%
RATE INCREASE�
SALES TAX REVENUE
AS A PERCENTAGE OF
NET OPERATING REVENUES
1988 1989
1993
I I
PROPERTY TAX REVENUES
A decline in the level of revenue collected as property taxes may be an indication that overall
property values are declining, local economic health is declining, or a decline in the total number of
households. A decline could also result from unwilling default on property taxes by property
owners. Another reason for decline might be from inefficient assessment or appraisal of property.
Finally, a decline can result from deliberate default on taxes.
College Station property tax revenues increased by 8.2% in 1993. This is a good sign after two
years of little or no increase. As shown in the lower segment of the graph, this revenue increased
after adjustment for inflation for the first time since 1986.
Strong growth (8.2%) in 1993 after two years of no growth.
WARNING TREND: DECREASING PROPERTY TAX REVENUES
5,00011
4,500, i
4,000-1:
3,500-:'
z 3,000- '1
Cn z
CC <
c/) 2,500-
0
00 �M- 2,000-.:
I
1 987
1
1988
1 �89
1.9
i �91
1992 1993
12
Property Tax Revenue as a Percentage of Net Operating Revenues
This indicator shows what portion of net operating revenues come from the collection of property
tax. In the most ideal case, this indicator would remain relatively constant. This indicator can be
used as a gauge for determining if property tax revenues are growing at the same rate as other city
revenues.
Property tax revenue as a percentage of net operating revenues declined in 1993 by about one
percentage point. This indicator has been declining since 1990. As shown in the previous graph,
property tax revenue has not decreased in this period. It has just not grown like other major
revenues. This trend should level off or reverse in 1994 due to the tax rate increase and increased
assessed valuation.
The dip in 1988 is due to the 15 month fiscal period. Only one year of property tax revenue was
divided by 15 months of other net operating revenues.
0 Property tax continues to decline as a portion of revenues.
WARNING TREND: CONTINUOUS DECREASES OR INCREASES IN PROPERTY TAX
REVENUES AS A PERCENTAGE OF NET OPERATING REVENUES
0.1
0.09
0.08
0.07-7�
0.06-
0.05-
0.04-
0.03—..
0. 02--.�
0.01--
1984 1985
1986
1987
1988
1989
KOM
[me
1992
1993
13
GENERAL FUND RETURN ON INVESTMENT
The amount of the return on investment transfer to the General fund is based on several factors;
level of activity in the enterprise funds and overall enterprise fund capital. The City Council
determines what percentage of revenues will be transferred to the General fund from the enterprise
funds.
In the past ROI has been about 12% of utility revenues. In 1991 ROI decreased to about 10% of
utility revenues and has stayed in that range.
0 R.O.I. revenue increased 9.6%, but stayed at 10% of utility revenue.
WARNINGTREND: INCREASING USE OF
GENERAL FUND REVENUE SOURCE
go
moil]
RETURN ON INVESTMENT AS A
77771
N
NZ
3,500
3,000 -
0 77777
2,500
Z
g M
o'l
0.14
ROI AS A % OF
UTILITY REVENUES
0.12
0.1
7.
om
........... . . .
0.06
. . . . . . . .
OnA
0.02
1
0
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
14
GENERAL FUND DEPARTMENTAL EXPENDITURES
The chart below shows how expenditures in the General Fund, and each department within it, have
changed since 1984. Overall, departmental expenditures have grown at a compound annual rate of
8.3%. As the graph shows, most of the departments grew at about this rate. Notable exceptions
are General Government which grew at an annual rate of 2.7% and Management services which
grew 27% annually since 1984. There are two major reasons for the large growth rate in
Management Services expenditures. One is the growth of the M.I.S. division due to the increased
use of computers and related systems by the City. The other reason is the increased commitment to
the maintenance of City buildings.
Departmental expenditures have grown at a compound average rate of 8.3%.
WARNING TREND: LARGE INCREASES IN EXPENDITURES UNRELATED TO
GROWTH OR INCREASED SERVICES.
n I oil
off
mu,
Z'
12000-
101000-
0
0
b
8�000-
6,(M--:
4,000-10
2,000-
0
1984
15 M�NTH
IISCAJ PERIOD I
I I I I I I I I i
1985 1986 1987 1988* 1989 1990 1991 1992 1993
Ll GEN. GOVT. 03 COMM. SERVICE E FISCAUHR
El DEV. SERVICES IM PUB. SERVICES 0 PARKS
El POLICE P1 FIRE
11 MGMT. SERVICES
15
GENERAL FUND UNRESERVED - UNDESIGNATED FUND BALANCE
This indicator reveals the year-end funds available in the General Fund. These funds have not been
appropriated for any activities. This fund balance can be thought of as a reserve, and the City's
financial policy states that the amount be at least 15% of total fund expenditures. The bars in the
graph represent the fund balance and the background shaded area represents the amount needed to
meet the policy.
General Fund balance was $ 3.4 million in FY93 well above 15% policy.
WARNING TREND: CONTINUOUS DECLINE IN UNRESERVED - UNDESIGNATED
BALANCE
3,500
3,000
cn 2,500
Cn
M
0 2,000
cn 1,500
0
Ca 1,000
500
101
FUND BALANCE
1984 1985 1986 1987 1988* 1989 1990 1991
16
ENTERPRISE FUNDS EXPENDITURES
The chart below shows how expenditures in the utility funds have changed since 1984.
Expenditures for all three funds increased from $15M to $29M in that period. Compound annual
increases averaged 7.5 %, 5.7 %, and 9. 1 % for Electric, Water, and Waste Water respectively.
WARNING TREND: CONTINUING LARGE AND UNEXPLAINED EXPENDITURE
INCREASES.
Z
30,000-z
25,000-Z
20,000-Z/
Cf) Z
CC
15,000
0 0
��§ 1-0711
0-
1983
1984 1985 1986 1987
I I I 1 1
1988 1989 1990 1991 1992
0 electric 10 water M sewer
F
�7:
-z
1993
17
SOLID WASTE COLLECTION AND LANDFILL FUND EXPENDITURES
The Solid Waste Collection Fund is composed of the activities for Residential and Commercial
Collection. Starting in 1991, Solid Waste Disposal expenses were accounted for in the Landfill
fund. Expenditures in the Solid Waste Collection Fund are for items such as salaries & benefits,
supplies, property services, professional services, capital outlay and maintenance.
The Landfill fund accounts for the revenues and expenditures from solid waste disposal.
Expenditures in the fund are for items such as salaries & benefits, supplies, property services,
professional services, capital outlay, and maintenance. The large increase in 1993 is due to a
change in the way construction costs are accounted. These costs are expensed each year rather
than treated as capital costs. Another reason for the large increase in landfill expenditures are
compliance costs associated with meeting federal mandates.
WARNING TREND:
EXPENDITURES.
3,500"
3,000--/
2,500--'
z
2,000-'/
0 C) 1.500--/
CONTINUING LARGE AND UNEXPLAINED INCREASES IN
1,000-A.
�i. 4 1 J'�
500--
0
1984 1 �85 1 �86
-ANDFILL
EXPENDITURB
18
PERSONNEL
Personnel costs make up about 80% of the City's General Fund budget and are a large part of the
Utility fund budgets. In the past ten years the number Of City employees has increased about
1.5% annually on average.
The City added 17 positions in 1993. Seven new positions were added to the General Fund. Some
of these are: one Traffic Officer, one Warrant Officer, and one Energy Auditor. Seven new
positions were also added in Solid Waste Collection and Disposal. Each of the Utility funds added
one position also.
0 City staff increases by 17 positions or 3% in 1993.
WARNING TREND: PERSONNEL INCREASES OUTPACING GROWTH OR SERVICE
LEVEL INCREASES.
600-/
500-1/
CITY PERSONNEL
141211
0 " - , ��- I , - - I , 1.1-1— � � , " I I I
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
120-// I=X
....
. ....
X.,
100 f�!;:i!
!uJII 4 It
00
W,
-M!z
jo
80
-1,5 iR*-,
ti
.10
60
0,
-12
CITIZENS PER
EMPLO Y E E
.........
20-1
0
1984
1985 1986 1987
1988
1989 1990
1991
1992
1993
19