9.1. SR 01-21-2014 - Laserfiche WebLink

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Criteria I Governments I U.S. Public Finance: U.S. Local Governments General Obligation Ratings:Methodology And Assumptions to the fiscal year. In some jurisdictions,this results in the accounting creation of low fund balances in a small number of credits that in reality have substantial resources. On the other hand,high fund balances as a percentage of expenditures may overestimate flexibility if the quality of receivables recognized is suspect.The Available Fund Balance measure will be net of any Available Fund Balance that includes questionable receivables that we do not expect to be collected,but if receivables are unable to be projected with confidence,the negative"questionable receivables"score adjustment is used instead of making an adjustment to the data(see table 10). For entities that report on a cash basis,the criteria use cash balances instead of fund balances.The score is worsened by one,however, to compensate for the lack of clarity on what funds are truly available.The maintenance of a consistently high fund balance--exceeding twice the level associated with the top score--that we expect to continue represents a positive adjustment that may offset a negative adjustment when both conditions exist. 63. Other forms of flexibility primarily include the ability to raise additional revenues or reduce expenditures.These tools are at least equal in power to the use of existing balances,but qualitative adjustments better suit their complexity due to the various forms they can take.With regard to tax caps,the institutional framework score incorporates the extent to which statewide tax caps exist,but the budgetary flexibility score differentiates those credits that retain flexibility despite the tax caps.The criteria separately assess local political support for increases,including cases where there are self-imposed limitations as a result of local charter initiatives or referenda. 64. The option to use fund balance in the near term can provide fiscal flexibility although fund balance drawdowns may impair future fiscal flexibility.Likewise,increasing fund balances can enhance fiscal flexibility. Our forward-looking analysis evaluates the budget performance for the current and next fiscal year. If our projections result in a score change, either up or down,the score is adjusted by one point in the relevant direction. G. Budgetary Performance Score 65. The budgetary performance score measures the current fiscal balance of the government,both from a general fund and total governmental funds perspective.Table 11 details the scoring for this measure. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 12,2013 23 1190266 1300881696