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Criteria I Governments I U.S. Public Finance: U.S. Local Governments General Obligation Ratings:Methodology <br /> And Assumptions <br /> Tableill <br /> Assessing The Budgetary f paragraphs <br /> Available Fund Balance As A Of Expenditures <br /> "-15 X15 4-8 1-4 <1 <br /> Sere 1 2 3 d 5 <br /> Ascore of°1',`2,-T,*, and m eons very stmng,strong, adequate, kveak. anti very%wak, respectively. <br /> {qualitative factors with a positive impact an the inrt ar Qualitative fa torswth a negative impact on the initial <br /> SOON_- SCOW. <br /> If projedionsfurthe current yearand the follobMngiyear If projections for the currentyearand the following year <br /> suggest a better initial scare. suggest a vdorse initial scare. <br /> !{bi14,to avoid financial imbalances Mhdemonstrated High levels afquestionable receivabl es a r amounts due from <br /> capacity and vAll in g n ess to cut operational spending(by more other funds vith deficit balances. <br /> than 2%), resulting from a flexible cast structure, flexible <br /> legislation, andW%%idespread political support. <br /> Existing state taxesps do not apply to thegovernment, orthe Limited capacityto cut expenditures due to infrastructure or <br /> government retains substantial flexibilityunderthe caps. operational needs or political resistance. <br /> Demonstrated ability and WIlingnessto raise taxes Men Limited capac4,to raise revenuesdueto consistent and <br /> needed (and voter support is usually obtained when such ongoing political resistances°hick can in dud eselfamposed <br /> approval is required). restrictionsthreugh charter or local initiative processes. <br /> Timing of fiscal year and tax billing dates result in high cash ', here cash accounting is used,the criteria use cash <br /> %vith abnormalhf Io,,v fund balance levels. balances instead of fund balances and the score is worsened <br /> by one point. <br /> 1,1 aintenance of an available fund balance exceeding aO% of <br /> general fund expenditures.fDr the most recently reported year, <br /> the current year and next year. <br /> For each relevant qualitative factor,the score changes by ane pDir>t. The final budgetary texdbilityscnre equals the initial scare <br /> adjusted up or down based on the net effect of the qualitative factors. Arnetricthat equalsa cutoffpo-int between two initial <br /> scares vv 11 equate to the worse scare. <br /> 60. Various qualitative factors may raise or lower the final budget flexibility score relative to the initial score, as shown in <br /> table 10. <br /> 61. The existing Available Fund Balances reflect the most obvious and measurable form of flexibility. However,we <br /> recognize that municipalities may have ongoing balances legally available for operations outside the general fund. <br /> Therefore,the Available Fund Balance in the initial score reflects all available funds legally available for operations. <br /> The initial score is the Available Fund Balance as a percentage of general fund expenditures.The measure uses data <br /> from the most recent reported year. <br /> 62. Qualitative adjustments to the budgetary flexibility score generally compensate for shortcomings in the fund balance <br /> measure or assess other forms of flexibility. GASB Interpretation No. 5 specifies how much of taxes already levied and <br /> possibly even collected must be deferred from a recognition perspective based on the timing of these elements relative <br /> WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 12,2013 22 <br /> 1190266 1300881696 <br />