Minutes 03/28/2000 - Laserfiche WebLink

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March 28, 2000 21,000 18,000 15,000 12,000 9,000 6,000 3,000 Figure 7: Debt Service 95 96 97 I~ Actual 98 99 00 01 02 03 04 05 ~ Projection +Debt Service as a % of Revenues I I The chart above depicts our actual status relative to our target over the last 5 years and a forecast through fiscal year 2005. Based on our current assumptions of new debt and projected revenues, our goal is within reach. It is important to note that this target has two variables, our annual debt service payments and our revenues. By continuing to invest wisely in tax revenue producing projects such as the new Portsmouth Renaissance Hotel and Waterfront Conference Center, our capacity to incur debt improves. Also, by effectively managing the amount of new debt issued, we positively impact the first variable in the equation and further our progress toward achieving our goals. FUND BALANCE (Operating Reserve) Fund Balance Objective: Maintain fund balance within a range of 8% to 12 % of operating revenues. Fund Balance, also known as our operating reserve, is one of the primary indicators of the City's fiscal health. It is, simply stated: the cumulative balance of revenues in excess of expenditures. The reserve provides a readily available funding source in times of emergency and assists in "leveling the peaks and valleys" in our cash flow that occur due to the timing of collections of our major revenue sources, real estate and personal property taxes. This reserve was critical in September 1999 when the City experienced the damaging effects of Hurricane Floyd. Without this reserve, we would not have been able to as quickly address the emergency situations that required immediate purchases of supplies, materials and services for which there were no budgeted funds. Fortunately, FEMA, the Federal Emergency Management Agency, and the State will reimburse the City for the majority of these emergency expenditures. Unfortunately, there is a delay between our spending the funds and our receiving reimbursement. Due to the adequacy of our reserve, we were able to meet the emergency needs and continue daily operations without having to borrow funds to meet our cashflow needs. It is my sincere hope that it is at least another 100 years before we experience another series of storms such as those that interrupted our lives in the fall of 1999, but this event firmly illustrates the importance of maintaining an adequate "rainy day fund." 20,000 16,000 12,000 8,000 4,000 Figure 8: Fund Balance 95 96 97 98 99 00 01 o mmma Undesignated O 8 ~/o of Revenues & 12% of Revenues