Current through Register Vol. 48, No. 9, September 27, 2024
(b)
(1) The
local government owner or operator must have the following information
available, as shown in the year-end financial statements for the latest
completed fiscal year:
(i) Total Revenues:
Consists of the sum of general fund operating and non-operating revenues
including net local taxes, licenses and permits, fines and forfeitures,
revenues from use of money and property, charges for services, investment
earnings, sales (property, publications, etc.), intergovernmental revenues
(restricted and unrestricted), and total revenues from all other governmental
funds including enterprise, debt service, capital projects, and special
revenues, but excluding revenues to funds held in a trust or agency capacity.
For purposes of this test, the calculation of total revenues shall exclude all
transfers between funds under the direct control of the local government using
the financial test (interfund transfers), liquidation of investments, and
issuance of debt.
(ii) Total
Expenditures: Consists of the sum of general fund operating and non-operating
expenditures including public safety, public utilities, transportation, public
works, environmental protection, cultural and recreational, community
development, revenue sharing, employee benefits and compensation, office
management, planning and zoning, capital projects, interest payments on debt,
payments for retirement of debt principal, and total expenditures from all
other governmental funds including enterprise, debt service, capital projects,
and special revenues. For purposes of this test, the calculation of total
expenditures shall exclude all transfers between funds under the direct control
of the local government using the financial test (interfund
transfers).
(iii) Local Revenues:
Consists of total revenues (as defined in paragraph (b)(1)(i) of this section)
minus the sum of all transfers from other governmental entities, including all
monies received from Federal, State, or local government sources.
(iv) Debt Service: Consists of the sum of all
interest and principal payments on all long-term credit obligations and all
interest-bearing short-term credit obligations. Includes interest and principal
payments on general obligation bonds, revenue bonds, notes, mortgages,
judgments, and interest bearing warrants. Excludes payments on
non-interest-bearing short-term obligation, interfund obligation, amounts owed
in a trust or agency capacity, and advances and contingent loans from other
governments.
(v) Total Funds:
Consists of the sum of cash and investment securities from all funds, including
general, enterprise, debt service, capital projects, and special revenue funds,
but excluding employee retirement funds, at the end of the local government's
financial reporting year. Includes Federal securities, Federal agency
securities, state and local government securities, and other securities such as
bonds, notes and mortgages. For purposes of this test, the calculation of total
funds shall exclude agency funds, private trust funds, accounts receivable,
value of real property, and other non-security assets.
(vi) Population: consists of the number of
people in the area served by the local government.
(2) The local government's year-end financial
statements, if independently audited, cannot include an adverse auditor's
opinion or a disclaimer of opinion. The local government cannot have
outstanding issues of general obligation or revenue bonds that are rated as
less than investment grade.
(3) The
local government owner or operator must have a letter signed by the chief
financial officer worded as specified in paragraph (c) of this
section.
(c) To
demonstrate that it meets the financial test under paragraph (b) of this
section, the chief financial officer of the local government owner or operator,
must sign, within 120 days of the close of each financial reporting year, as
defined by the twelve-month period for which financial statements used to
support the financial test are prepared, a letter worded exactly as follows,
except that the instructions in brackets are to be replaced by the relevant
information and the brackets deleted:
LETTER FROM CHIEF FINANCIAL OFFICER
I am the chief financial officer of [insert: name and
address of the owner or operator]. This letter is in support of the use of the
local government financial test to demonstrate financial responsibility for
[insert: "taking corrective action" and/or "compensating third parties for
bodily injury and property damage"] caused by [insert: "sudden accidental
releases" or "nonsudden accidental releases" or "accidental releases"] in the
amount of at least [insert: dollar amount] per occurrence and [insert: dollar
amount] annual aggregate arising from operating (an) underground storage
tank(s).
Underground storage tanks at the following facilities are
assured by this financial test [List for each facility: the name and address of
the facility where tanks assured by this financial test are located. If
separate mechanisms or combinations of mechanisms are being used to assure any
of the tanks at this facility, list each tank assured by this financial test by
the tank identification number provided in the notification submitted pursuant
to R.61-92.280.22.
This owner or operator has not received an adverse opinion,
or a disclaimer of opinion from an independent auditor on its financial
statements for the latest completed fiscal year. Any outstanding issues of
general obligation or revenue bonds, if rated, have a Moody's rating of Aaa,
Aa, A, or Baa or a Standard & Poor's rating of AAA, AA, A, or BBB; if rated
by both firms, the bonds have a Moody's rating of Aaa, Aa, A, or Baa and a
Standard and Poor's rating of AAA, AA, A, or BBB.
WORKSHEET FOR MUNICIPAL FINANCIAL TEST
Part I: Basic Information
1. Total Revenues
a. Revenues (dollars) _______________
Value of revenues excludes liquidation of investments and
issuance of debt. Value includes all general fund operating and non-operating
revenues, as well as all revenues from all other governmental funds including
enterprise, debt service, capital projects, and special revenues, but excluding
revenues to funds held in a trust or agency capacity.
b. Subtract interfund transfers
(dollars)
c. Total Revenues
(dollars)
2. Total
Expenditures
a. Expenditures (dollars)
______________
Value consists of the sum of general fund operating and
non-operating expenditures including interest payments on debt, payments for
retirement of debt principal, and total expenditures from all other
governmental funds including enterprise, debt service, capital projects, and
special revenues.
b.
Subtract interfund transfers (dollars) ____________
c. Total Expenditures (dollars)
_______________
3. Local
Revenues
a. Total Revenues (from 1c)
(dollars) _______________
b.
Subtract total intergovernmental transfers (dollars)
__________________________
c. Local
Revenues (dollars) _____________
4. Debt Service
a. Interest and fiscal charges (dollars)
_____________________________________
b. Add debt retirement (dollars)
_____________________________________
c. Total Debt Service (dollars)
_____________________________________
5. Total Funds (dollars) _________________
(Sum of amounts held as cash and investment securities from
all funds, excluding amounts held for employee retirement funds, agency funds,
and trust funds)
6.
Population (Persons) Part II: Application of Test
7. Total Revenues to Population
a. Total Revenues (from 1c)
_____________________________________
b. Population (from 6)
_____________________________________
c. Divide 7a by 7b
_____________________________________
d. Subtract 417
_____________________________________
e. Divide by 5,212
_____________________________________
f. Multiply by 4.095
_____________________________________
8. Total Expenses to Population
a. Total Expenses (from 2c)
_____________________________________
b. Population (from 6)
_____________________________________
c. Divide 8a by 8b
_____________________________________
d. Subtract 524
_____________________________________
e. Divide by 5,401
_____________________________________
f. Multiply by 4.095
_____________________________________
9. Local Revenues to Total Revenues
a. Local Revenues (from 3c)
_____________________________________
b. Total Revenues (from 1c)
_____________________________________
c. Divide 9a by 9b
_____________________________________
d. Subtract .695
_____________________________________
e. Divide by .205
_____________________________________
f. Multiply by 2.840
_____________________________________
10. Debt Service to Population
a. Debt Service (from 4c)
_____________________________________
b. Population (from 6)
_____________________________________
c. Divide 10a by 10b
_____________________________________
d. Subtract 51
_____________________________________
e. Divide by 1,038
_____________________________________
f. Multiply by -1.866
_____________________________________
11. Debt Service to Total Revenues
a. Debt Service (from 4c)
_____________________________________
b. Total Revenues (from 1c)
_____________________________________
c. Divide 11a by 11b
_____________________________________
d. Subtract .068
_____________________________________
e. Divide by .259
_____________________________________
f. Multiply by -3.533
_____________________________________
12. Total Revenues to Total Expenses
a. Total Revenues (from 1c)
_____________________________________
b. Total Expenses (from 2c)
_____________________________________
c. Divide 12a by 12b
_____________________________________
d. Subtract .910
_____________________________________
e. Divide by .899
_____________________________________
f. Multiply by 3.458
_____________________________________
13. Funds Balance to Total Revenues
a. Total Funds (from 5)
_____________________________________
b. Total Revenues (from 1c)
_____________________________________
c. Divide 13a by 13b
_____________________________________
d. Subtract .891
_____________________________________
e. Divide by 9.156
_____________________________________
f. Multiply by 3.270
_____________________________________
14. Funds Balance to Total Expenses
a. Total Funds (from 5)
_____________________________________
b. Total Expenses (from 2c)
_____________________________________
c. Divide 14a by 14b
_____________________________________
d. Subtract .866
_____________________________________
e. Divide by 6.409
_____________________________________
f. Multiply by 3.270
_____________________________________
15. Total Funds to Population
a. Total Funds (from 5)
_____________________________________
b. Population (from 6)
_____________________________________
c. Divide 15a by 15b
_____________________________________
d. Subtract 270
_____________________________________
e. Divide by 4,548
_____________________________________
f. Multiply by 1.866
_____________________________________
16. Add 7f + 8f + 9f + 10f + 11f + 12f + 13f
+ 14f + 15f + 4.937 __________________________
I hereby certify that the financial index shown on line 16
of the worksheet is greater than zero and that the wording of this letter is
identical to the wording specified in R.61-92.280.105(c) as such regulations
were constituted on the date shown immediately below.
[Date] ________________________________________
[Signature] ____________________________________
[Name] _______________________________________
[Title]
________________________________________
