5. - hampton

Financial Summariesand Policies

City Manager's Office - Budget Division City of Hampton

5. Financial Summaries and Policies

Table of Contents

Financial Policies - Definition of Terms

Policy #1: Debt to Assessed Value

Policy #2: Debt Service

Policy #3: Debt Retirement

Policy #4: Equity Funding

Policy #5: Unassigned Fund Balance

Unassigned Fund Balance - Excess Analysis and History (Fiscal Years 2010-2020)

Financial Policies ~ Definition of Terms

City Manager’s Office - Budget Division City of Hampton

1. Annual Budget ~ Total General Fund estimated revenues and appropriations.

2. Assessed Value ~ Refers to the assessed value of all taxable real estate within the geographicboundaries of the City of Hampton as of the most recent annual appraisal by the Assessor of RealEstate, with the exception of any amounts labeled estimates. Amounts included are based on theestimate prior to actual appraisal.

3. Capital Expenditures ~ Amounts appropriated to fund major capital improvements and economicdevelopment projects.

4. CIP ~ The Capital Improvement Plan (CIP) is a five-year expenditure plan that addresses the acquisitionof property and equipment, new construction and other major improvements to existing public facilities.The first year of the CIP is incorporated into the Manager’s Recommended Budget and the CouncilApproved Budget as the Capital Budget component for the respective fiscal year.

5. Debt Service ~ Payment of principal and interest related to all long-term debt according to a pre-determined payment schedule.

6. Local Revenues ~ Total of all General Fund revenues, except for state revenues and federal aid.

7. Net Bonded Debt ~ The unpaid and outstanding General Obligation bonds of the City as of June 30.

8. Total Estimated Revenues ~ Total General Fund estimated revenues, not including state and federalrevenues received exclusively for Hampton City School operations.

9. Unassigned Fund Balance ~ General Fund Balance and is net of reserves and other restricted orspecial purpose amounts (which is sometimes referred to as a Fund Balance available forappropriation).

Policy 1 - Debt toAssessed Value


Total Taxable Real Estate (RE) Assessed Value 11,236,024,601$ Total Personal Property Assessed Value 1,303,705,841$

Total Taxable Valuation 12,539,730,442$

POLICY 1-AGeneral Obligation (direct) bonded debt shall not exceed 3% of taxable real estate assessed valuation.

3% of Taxable Real Estate (RE) Valuation 337,080,738$

Total General Obligation (GO) Debt (1) 281,374,987$ % of GO Debt to Taxable RE Assessed Value 2.5%

In Compliance With Policy 1-A Yes

POLICY 1-BDirect/Indirect/Overlapping debt to total taxable valuation shall not exceed 4.5%.

4.5% of Total Taxable Valuation 564,287,870$

Net Direct/Indirect/ Overlapping Debt (2) 435,803,987$

In Compliance With Policy 1-B Yes

POLICY 1-C Overlapping debt shall not exceed 1% of total valuation.

1% of Total Taxable Valuation 125,397,304$

Overlapping Debt (3) 85,829,000$

In Compliance With Policy 1-C Yes

(1) Net bonded debt outstanding includes existing and proposed general obligation bonds and general obligation notespayable less bonds funded with Steam Plant and Stormwater revenues.

(2) Net Direct/Indirect/Overlapping Debt includes existing and proposed general obligation bonds, general obligation notespayable, and Convention Center overlapping debt, less bonds funded with Steam Plant and Stormwater Revenues.

(3) Overlapping debt consists of H2O Peninsula Town Center CDA debt.

Policy 2 - Debt Service


POLICY 2

Total Expenditures 498,718,372$ 10% Total Expenditures (1) 49,871,837$

Annual Debt Service Cost (DSC) (2) 40,931,730$

Debt Service as % of Total Expenditures 8.2%

In Compliance With Policy 2 Yes

(1) Total expenditures includes School operating expenditures and Convention Center.(2) Annual debt service cost includes debt service on all general obligation bonds and Convention Center.

Debt Service (direct and indirect) shall not exceed 10% of total expenditures of General Fund plus expenditures of City's public school system.

Policy 3 - Debt Retirement


POLICY 3 Ten year payout ratio shall not be less than 60% for General Obligation Indebtedness.

Total General Obligation Indebtedness 268,054,325$ Principal

Amount retired within 10 years 206,328,393$ Principal

10 year payout ratio 77.0%


Policy 4 - Equity Funding


POLICY 4-AMinimum of 2% to 6% of General Fund revenues applied to capital projects each year.

Total General Fund Revenues 487,881,672$

General Fund Revenues less Revenues for Schools 352,312,781$

2% of General Fund Revenues (less Schools) 7,046,256$

6% of General Fund Revenues (less Schools) 21,138,767$

General Fund Expenditures on Capital Projects 15,726,879$

In Compliance With Policy 4-A Yes

POLICY 4-B

Total FY20-24 General Fund Revenues for CIP 73,309,955$

In Compliance With Policy 4-B Yes

Minimum of 10% to 15% of total Capital Improvement Plan (CIP) over a rolling five-year period to be funded from General Fund revenues.

Policy 5 - UnassignedFund Balance


POLICY 5

Total Revenues 487,881,672$

Total Revenues Less Transfers 481,204,814$

10% of Total Revenues Less Transfers 48,120,481$

Unassigned Fund Balance (UFB) 57,908,399$

UFB as % of Total Revenues Less Transfers 12%


Unassigned Fund Balance shall be maintained at a level of not less than 10% of total revenues.

To the extent that the Unassigned Fund Balance is drawn upon, replenishment of such amount drawn shall occur over three years.

Unassigned Fund Balance -Excess Analysis and History


FY 2019 Council Approved Operating Budget (Less General Fund Transfers)* $464,926,418

Unassigned Fund Balance (Estimated Fund Balance per Policy-10% of above) 46,492,642

Projected Fund Balance at June 30, 2018 54,330,481

Estimated Fund Balance in Excess/ (Deficit) of Policy 7,837,839

Fund Balance Utilized in the FY 2019 Budget:

Less: Use of Unassigned Fund Balance for FY19 Capital Improvement Plan (4,629,925)

Estimated Unassigned Fund Balance in Excess/ (Deficit) of Policy $3,207,914

* Includes $2.0 million transfer for the Schools Operating Fund

Unassigned Fund Balance At End of Amount (in $ Millions)

Percentage of Operating Budget

June 30, 2008 55.99 12.8%June 30, 2009 53.74 12.3%June 30, 2010 56.56 13.2%June 30, 2011 50.20 11.9%June 30, 2012 51.18 12.1%June 30, 2013 54.19 12.4%June 30, 2014 51.59 11.5%June 30, 2015 52.11 11.7%June 30, 2016 54.30 11.7%June 30, 2017 54.33 11.9%

Projected June 30, 2018 54.33 11.5%

Note: During fiscal year 2007, City Council approved an increase in the policy guideline from 7.5% to 10%.The rating agencies consider an adequate Fund Balance to be an indicator of a strong financial positionand prudent financial management.

Unassigned Fund Balance - Analysisof Excess Above Policy Requirement for FY 2019

Unassigned Fund Balance - HistoryFY 2008 - 2018

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