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Financial Trends Presentation en "'C C (l) '- I- - co .- u c co c .- U. (l) C) c co ~ C) c o ....J '- iii CIty of Long Range Financial Trends Salina Overview . Looks at selected key economic and financial data . Over an extended period: 1996 to the Present . Data adjusted to a comparable measure . Most often to 1996$ per capita . Adjusts for both population and pricing changes . Key Assumptions include . Use of the Consumer price index . Population estimates based on State estimates, except 2000 . Financial information pulled from budgets and annual financial reports CIty of Long Range Financial Trends Salina Overview . Assumptions continued . Currently includes only the main operating funds: . General and Employee Benefits, Water/Wastewater, Sanitation, Solid Waste; plus debt service. . Some exhibits may include other information .Interfund transfers that are in the nature of expenses for specific services are shown as expenses . Please exercise caution interpreting the Graphs. Pay attention to the scales. . Staff counts based on organization charts in annual budget. . Sometimes changed after budget adoption . Effects of vacancies CIty of Long Range Financial Trends Salina Overview . Organization . Tax and Economic Base Information . Organizational Information (Employment) . Revenue/Expenditure overview, by fund . Expenditure Trends by fund . By Class and Major Items . Departmental Information . Revenue Trends by Fund . Summary . Revenue Class ~of ~ Salina Long Range Financial Trends Tax and Economic Sase: Population Population 47,000 46,000 45,000 44,000 43,000 42,000 41,000 40,000 2>CO ~ 2>'0 2>0) s;)\::l s;)" s;)'l- s;)":J ~ s;)~ s;)CO s;)'\ "C?> "C?> "C?> "C?> 'l-CS 'l-CS 'l-CS rf5 'l-CS 'l-CS 'l-CS 'l-CS '.~' - -- ~ , - - - - - - - r- -- - - --- - - - - f-- - - - - - - - - 1- - - - - , - ,1- - - .- - - - - - - - - - - - - - f-- - - - - , , , , , , , , . Population has grown slowly . The increase (4%) in 2000 is the result of the Federal Census . State estimates understated? ~of ~ Salina Long Range Financial Trends Tax and Economic Sase: Per Capita Income Per Capita Income $31,000 $30,000 $29,000 $28,000 $27,000 $26,000 $25,000 $24,000 $23,000 $22,000 . Real per capita income has trended down over the period .2007 still higher than 1996 $24..1199 23,860 pj<O ~ pj'b pjOJ ~~ ~" ~~ ~fl;) ~~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 1__1996 $ -- Current $ - Linear (1996 $) 1 ~of ~ Salina Long Range Financial Trends Tax and Economic Sase: Property Tax Property Value per Capita and mill levy . Property Value per capita $7,000 29.00 in 1996$ has increased $6,500 steadily 28.00 $6,000 27.1450 . The mill levy has 27.00 decreased, most sharply in J!! $5,500 ~ the late 1990's 'Q. co Q) () $5,000 26.00...J . The mill levy represented ~ - Q) :E here reflects the City of c.. $4,500 fRo $4,616 25.00 Salina total levy rate $4,000 24.000 $3,500 24.00 ~~ ~.OO OjOj'O Ojq} OjOj'O 0j0j0j r:::,\)\) r:::,\)" r:::,\)'t- r:::,\)":J r:::,d>' r:::,\)~ r:::,\)'O r:::,r:Y- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 1_ Assessed Value per capita -+-- City Mill Levy I CIty of !:i Salina Long Range Financial Trends Tax and Economic Sase: Sales Tax Retail Sales Per Capita in 1996$ $17,500 $17,000 $16,500 $16,000 $15,500 $15,000 $14,500 ~fo ~" ~CO ~~ ~~ ~" ~~ ~":l ~'" ~~ ~fo ~ ,,OJ ,,OJ ~ ,,OJ ~ ~ ~ ~ ~ ~ ~ ~ . Retail sales per capita increased significantly in the late 1990's, before falling in the early 2000's. A slight recovery appears to be underway . The pattern reflects regional economics and competition with surrounding regional centers . Overall, sales per capita have kept pace with inflation and population, but our position within the regional economic structure has not changed . This is not adjusted for legislative changes to the tax base (exemptions). In 1996, about 36% of retail sales were taxable. By 2005, this had declined to about 34%. . Destination Sourcing/Use Tax changes implemented in 2003 CIlyof ~ Salina Long Range Financial Trends . Citywide Personnel Expenditures All Funds Personnel $400 $350 $300 $250 $277.87 $200 454 $150 $347.27 rI.--c "' ~. _ ~..-" ~ ~~ ~~'~ == ~ -- . .~~ 517 . ____ Salaries -+- Benefits -.- # Employees. ...-- . .'---' $117.95 $100 .--+- . . . . . . $50 $79.17 600 550 . Salary and Benefits also show long term growth 500 VI Gl Gl >- o 450 Q, E w ... o 400 =II: 350 $- 300 1996 1997 1998 1999 20002001 20022003 2004200520062007 . Due to . Pay Plan adjustments . Growth in number of employees CIlyot ~ Salina $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $- Long Range Financial Trends . Citywide Non-Personnel Expenditures Non-Personnel Expense in per-capita 1996$ All Funds ~ . Services have increased somewhat . Supplies are Steady . Debt Service and Capital are decreasing .Interfund Transactions are Increasing , & i .~ \~'~~..~ ~~ ~ &;-; -+- Supplies __ SeNces ~Capital Outlay --*- Debt SeNce -+-Interfund Transactions '--' J!l xi&.. )( . iV"1> ~Al ~ RJ<O ~ RJ'b RJOj ~(;;) ~" ~'\o ~"=> ~~ ~"=> ~<o ~ ~~"os"OS~~~~~~~~ CIlyot ~ Salina Long Range Financial Trends elnterfund Transactions, By Fund Interfund Transactions per Capita $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $- ~ <~ ./ ............,<:tf- -.- ~ " ...-""~~. ': ..... ~~. 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1_ General - Sanitation -- Solid Waste -- Water& Wastewater I . The increase in interfund transactions reflect increasing support of the General Fund by the Enterprise Funds CIlyot ~ Salina Long Range Financial Trends . Citywide Capital Investment Operational Compared to Bonded Capital Project Cash Expense, 1996 $ t/) 18,000 -g 16,000 CO t/) 14,000 ::J o 12,000 .s::: I- 10,000 8,000 6,000 4,000 2,000 o 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1--- Total Operational -- Total Bonded I . City wide capital investment has declined over time . Both cash and bonded capital , L CIlyot ~ Salina $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- .... -"~. .~.~ - Long Range Financial Trends . Citywide Capital Investment Cash Capital Four Largest Funds 1996 $ ~f "' '.",,~ ~~, '>~~~v ..............., 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1-- Water and sewer -- Special Gas Tax -..- General Fund --*- Sales Tax I . Cash Capital in the funds with the largest capital budgets has also declined over time . The exception is the Special Sales Tax Fund CIlyot ~ Salina Long Range Financial Trends Top Three Tax Revenues City Sales Tax, Franchise Fees, and Property Tax per Capita 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 ........... .--. . . . . .-*-. t . . Even with declining tax rates, property taxes have grown through the period due to growth in assessed valuation . The % cent tax has remained relatively constant . Franchise taxes show the effect of the franchise tax rates in 2006. /~-~. '--.'~ ~-':2,;=~ bO ;:,,~~~~ ~~~-'-" ''"~''i:". ~ ~ ~ ~ * ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ __ Sales Tax (112 cent) per cap~a ____ City A-operty Tax fer Cap~a -I-- Franchise Fees per cap~a CIlyot ~ Sadna Long Range Financial Trends Real Estate Taxes Levied by Fund RE Taxes levied by Fund in Constant $ $6,000 $5,000 III $4,000 'a s:: co $3,000 III ~ 0 J: $2,000 I- $1,000 $- *4=X=r-X",..x','~~~.O' ~ . Operations (General and Employee Benefits combined) are by far the largest component of Real Estate Taxes . Service to the City's Debt has declined as a component of Real Estate Taxes . The Flood and Drainage fund is a small, but critical component of the City tax levy. The bulk of this fund is focused on improvements to the drainage infrastructure PJCO ~ PJ'o PJO) ~\::l ~" ~'l- ~":J ~ ~~ ~co ~ "C15 "C15 "C15 "C15 r65 r65 r65 r65 r65 r65 r65 r65 --+-- Subtotal Operations _Utility ~ Bond and Interest _ Flood and Drainage Fund _ Special Liability $140 $120 $100 $80 $60 $40 $20 $- CIlyot ~ Salina Long Range Financial Trends Per Capita Real Estate Taxes Levied by Fund RE Taxes per Capita Constant $ . Operations (General and Employee Benefits combined) are by far the largest component of Real Estate Taxes on a per capita basis. This also includes the Liability and Utilities levy's that were made until 1998 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -+- Subtotal Operations ---'*- Bond and Interest _ Flood and Drainage Fund ~ $140 $120 $100 $80 $60 $40 $20 CIlyot ~ Salina Long Range Financial Trends Per Capita Real Estate Taxes Levied for Operations Taxes Levied: Per Capita 1996 $ for Operations . Employee Benefits is taking a larger share of real estate taxes. q $- 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 I D General Fund. Brployee Benefits I CIlyot ~ Salina $560 $540 $520 $500 $480 $460 $440 $420 $400 Long Range Financial Trends Per Capita Revenue and Expense for Operations 1996$ General and Employee Benefits Percapita Revenue and Expense in 1996 $ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ f ~ ~ ~ ~ ~ ~ [-+- Revenues ~ Expenditures I .In the last five years, total per capita revenues and expenses have grown. . The 2006 - 2007 short term trends do not bode well. CIlyot ~ Sa'" Long Range Financial Trends Operating, Capital, and Interfund Transactions, General Operations General/Emp Benefits Expense per capita in 1996 $ . Growth has clearly been in the area of operating expenses, as opposed to Capital or Interfund Transactions $600 $500 $400 $300 $200 $100 _~"'- .,.;":;:; .~,-_ 1 _~__ ~_"'~'" $- - I I I I I I'" I 1- ~Jo p)'\ ~q, ~O:; ~~ ~" ~~ ~n;, ~~ ~~ ~fo ~ "Q> ,,OJ "Q> "Q> ~ ~~ ~ ~~ ~~ ~ ~~ ~ 1--- Capital ----.-Interfund Transactions . Operating I CIlyof ~ Salina $300 $250 ~ $200 a. III 0 .. $150 CII D.. ~ CD $100 ell ell ... $50 $- Long Range Financial Trends Personnel Costs and Count, General Operations. General Operations Personnel , . $283:;:::' ~a a a. ::. a.. a : _ ._ ~T" _" ~~r'-~. -c. 3~8 ~-~ 309 . . . . . . $95.84 . ..---A .-----;- .H.. . _____ Salaries __ Benefits -+- # Employees $65.92 ~<o ~ pj'b pjO;) ~~ ~" ~~ ~fl;) ~~ ~~ ~c:c ~ "C1l "C1l "C1l "C1l ~~ ~~ ~~ ~~ ~~ ~~ ~~ ~~ 400 380 360 340 320 ~ c 300 ~ CII 280 D.. 'II: 260 240 220 200 . Both Salary and Benefit costs have increased . Authorized staffing has also increased . Cltyof Long Range Financial Trends Salina Non Personnel Costs, General Operations Non.Personnel, General Operations, per capita 1996$ $120 $100 $80 $60 - $40 $20 ~.. ,tl..,.. -~~=. ,- $- :,,// ~ro ~'\ ~CO ~Oj ~~ ~" ~'" ~fI;, ~~ ~~ ~ro ~ ,,OJ ,,OJ ,,OJ ,,OJ ~ ",fO:S ",fO:S ~ ~ ~ ~ ~ I-+- Supplies - Services - Capital Outlay ~ Interfund I . Purchase of Services increases . Expense for supplies is stable .Interfund transfers are realtively stable . Investment in capital declines significantly Long Range Financial Trends 1996 - 2007 Change in 1996 $ and Staffing Per Capita Staffing Percent Change % Change Change Change Police $ 19.23 28% 12 13% Buildings $ 6.84 112% 3 60% Municipal Court $ 6.31 41% 4 50% Traffic Control $ 6.27 179% - 0% Health $ 5.93 67% - 0% Fire & EMS $ 5.83 8% 4 5% Development Services $ 5.19 49% 9 90% Street $ 4.68 22% 2 7% Engineering $ 4.27 83% 6 86% Human Resources $ 1.62 51% 2 67% Legal $ 1.43 70% - 0% City Manager $ 1.22 22% 2 40% Human Relations $ 0.86 35% 1 33% Arts and Humanities $ 0.79 15% - 0% Smoky Hill Museum $ 0.65 13% 1 20% City Commission $ 0.41 26% - 0% Forestry $ 0.30 14% - 0% Downtown $ 0.22 23% - 0% Flood Works $ 0.14 5% - 0% Neighborhood Centers $ (0.06) -4% 1 100% Cemetary $ (0.29) -14% (1 ) -33% Swimming Pool $ (0.82) -43% - - Finance $ (0.84) -11% - 0% Recreation $ (0.88) -4% - 0% Parks $ (1.37) -8% 3 300% CapitaIOutlay(CIP) $ (48.77) -78% - 0% . Real Growth by Department . Public Safety and Health have been the fastest growing areas, with Public Works following. . Growth in Buildings represent largely a re-organization of those functions in late 90's. Maintenance staff were transferred from various departments and centralized CIlyot ~ Salina $36 $34 $32 $30 $28 $26 $24 $22 $20 Long Range Financial Trends Per Capita User Fees ( 1996$) Levied for Sanitation Sanitation Service Fees per Capita, 1996 $ . Sanitation Service Fees have increased more quickly than inflation . Increase from 1996 to 2000 related partially to landfill fees .2003 and after related to recycling program -+- Fees 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 CIlyof ~ Salina $37 $35 $33 $31 $29 $27 $25 Long Range Financial Trends Per Capita Revenue and Expense for Sanitation 1996$ Sanitation Per Capita Revenue and Expense in 1996$ eln the last five years, total per capita revenues and expenses have grown in parallel e Rapid increase from 1996 - 1998 reflect landfill changes. . -+- Revenues --- Expenditures . ~~~~~~~~*~~~ ~~~~~~~~~~~~ CIlyof ~ Salina $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $- Long Range Financial Trends Operating, Capital and Transfers, Sanitation Sanitation Expense per Capita, 1996$ . Growth has clearly been in the area of operating expenses and interfund transactions, as opposed to capital or landfill expenses -- Operating -- Capital ____Interfund Trans. --*- Landfill Fees ~., __t'O. _~~~ ~ ,- :. . Rl'O ~ Rl'b RlOj !::)\) !::)" !::)'\.- !::)":J ~ !::)~ !::)'O ~ "Cll "Cll "Cll "Cll ~ '\.-<::5 ~ '\.-<::5 ~ ~ ~ ~ CIlyot ~ Salina $14 $12 $10 $9.94 $8 $6 Long Range Financial Trends Personnel Costs and Count, Sanitation Sanitation Personnel $10.76 ~.~~""~. =~~ 21 .~-..,',,<::,;::-h~.---'~ $4 18 $2 ..--+- . $2.26 $- . .--. . --+ $4.03 . . . . 1996 19971998199920002001 200220032004 200520062007 30 28 26 24 22 __ Salaries 20 -+- Benefits 18 ........ # Employees 16 14 12 10 . Salaries have shown limited real growth . More growth in benefits . Staff #'s have grown largely to accommodate recycling and yard waste initiatives . Benefit growth is outpacing salary growth . Cltyof Long Range Financial Trends Non-Personnel Costs, Sanitation Salina $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $- Non-Personnel, Sanitation Costs, Per Capita 1996$ ,~ . #"Y'~.,#__ fA . < ,,,,_7;[ :-~ . .---. . . . . . . . . . ~~~~~~~~~~s:::.';)o.~~~ ~~~~~~~~~~~~ -+- Services ---- Supplies --.- Capital Outlay "*- Landfill Fees -r Interfund Trans, . Landfill fees make up a large proportion of the non-personnel costs. . Other costs are relatively flat, capital expenses are irregular . Capital peak in 2003 reflects the recycling truck purchase CIlyot ~ Salina $60 $50 $40 $30 $20 $10 $- Long Range Financial Trends Per Capita User Fees ( 1996$) Levied for Solid Waste Solid Waste service Fees per Capita, 1996 $ . Solid waste service Fees have declined $38~5 -+- Service Fees p:,<O ~ p:,Cb p:,0) ~~ ~" ~~ ~fl:J ~\>. ~~ ~~ ~'\ ,,<:8 "OS "OS "OS c-v(;3 ~ ~ ~ ~ ~ ~ ~ $60 $55 $50 $45 $40 $35 $30 $25 CIlyot ~ SalIna Long Range Financial Trends Per Capita Revenue and Expense for Solid Waste 1996$ Solid Waste Per Capita Revenue and Expense in 1996$ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I--+- Revenues -- Expenditures I eln general, revenue and expenditures have declined e Since 2004, expenditures have increased at a faster rate than revenues. CIlyot ~ Salina $30 fRo $25 <0 en $20 en ..... ~ $15 Q. l'Cl $10 0 ... Ql $5 Do $- Long Range Financial Trends Operating, Capital and Transfers, Solid Waste Solid Waste Expense per capita ~ -.<:~, ,;;.,"'~~ -- . .~ / . .------. ~"'\,..,-- --~_M_"J .l!::.'_.~ ~ ~\ i\ '" ~. ~'q~, iI' ~.~~d <0 I"- 00 0) 0 ....... N ('f) ~ LO <0 I"- 0) 0) 0) 0) 0 0 0 0 0 0 0 0 0) 0) 0) 0) 0 0 0 0 0 0 0 0 ....... ....... ....... ....... N N N N N N N N 1-- Operating -- Capital ---- Debt Service ~ I nterfund Trans. 1 L . Operating costs have increased, particularly in the last two years . Capital is highly variable . Debt service has declined . Transfers have increased dramatically CIlyot ~ Salina $8 $7 $6 i $5 ~ $4 ~ $3 lit $2 $1 $- Long Range Financial Trends Personnel Costs and Count, Solid Waste 20 18 16 6.57 14 l/l Gl 12 ~ 10 .2 Q, 8 E w 6 'II: 2.52 4 2 o Solid Waste Personnel $5.39 .----- ....---------. . . -----. . . .--. ,'~.... """'~" -- '~---b"::'~~~ . ~~, ~ 12 $1.21 ---- . . . .. . . . . . . . ~1O ~ ~<Q ~O) ~~ ~" ~'\, ~O:l ~'>- ~<o ~1O ~ "OS "OS "OS "OS ~ ~ ~ ~ ~ ~ ~ ~ I--Salaries __Benefits ~# Employees I 11 -+ . Flat or declining number of employee's . Benefit costs clearly increasing Long Range Financial Trends Non-Personnel Costs, Solid Waste Salina $30 $25 $20 $15 $10 $5 $- Non-Personnel Solid Waste Cost in 1996$ per Capita . Expenditures are relatively level, except for declining debt service and increasing interfund transactions . Capital is irregular ~~~ ,~ ~ I ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -+- Services -*- Debt Service __ Supplies __ Capital Outlay -JI(- Interfund Transactions 140 130 120 110 100 90 80 CIlyof ~ Salina Long Range Financial Trends Per Capita User Fees Levied for Water and Wastewater Water and WasteWater Fees per capita in 1996$ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I-+- Water Service Fees -+- Waste Water Service Fees I . Water and Wastewater fees have trended down slightly $280 $270 $260 $250 $240 $230 $220 $210 $200 CIlyot ~ Salina Long Range Financial Trends Per Capita Revenue and Expense for Water and Wastewater 1996$ WaterlWastewater Per Capita Revenue and Expense in 1996$ * ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I-+- Revenues --- Expenditures I .In recent years expenditures have outpaced revenues. . Both show long term declining trends in real purchasing power . Revenue - Expenditure Gap from 2002 on is result of conscious decision in last rate setting study. CIlyof ~ Salina Long Range Financial Trends Operating, Capital and Transfers, Water and Wastewater Water and Wastewater Expense per capita $160 $140 $120 $100 $80 $60 $40 $20 $- e Operating Expense is flat elnterfund transactions rising e Capital and Debt Service Declining - -~~.. !'::_~;;; ~ "" .._.1'/ ."1 -.~ }~"'~.....,l,.,.""-,, R>\o ~ R>'b R>0:l ~~ ~" ~I'l,. ~n:, ~~ ~<-;, ~\o ~ "OS "OS "OS "OS ~ ~ ~ ~ ~ ~ ~ ~ I ~ Operating ~ Capital -.- Debt Service ~ Interfund Transactions I CIlyot ~ Salina Long Range Financial Trends Personnel Costs and Count, Water and Wastewater Water and Wastewater Personnel $60 . Personnel levels and 90 costs have been stable $50 $45.06 .---------. $46.09 85 . Benefit costs are rising . . . . . . . . $40 #'-:;;;,~- ...,<"""- -,. --'~'-' 80 g-~ If -- Salaries $30 If 77 75 __ Benefits .J,: 73 __# Employees $20 70 ..--. . . . . $10 .-+ . . . . $15.56 65 $9.78 $- 60 pj<O ~ pjCO pjOJ ~~ ~" ~~ ~n:, ~~ ~~ ~<o ~ "os "os "os "os ~~ ~~ ~~~ ~ . Cltyof Long Range Financial Trends Non-Personnel Costs, Water and Wastewater Salina Water and Wastewater Non-Personnel Cost $100 $80 $60 $40 $20 $- . Capital Declines . Interfund transactions increase . +- ""-~ ......: ~, . Other categories relatively steady - ~ . .,.i~~.~~"'~. ~lQ ~ ~'b ~Oj ~~ ~, ~C)" ~Cl;) ~ ~~ ~lQ sS- ,OS,OS~,OS~~~~~~~~ -- Services ~ Debt Service -- Supplies ___ Capital Outlay -r- Interfund Transactions Long Range Financial Trends Summary Salina . Tax and Economic Base . Population Growth is flat . Per Capita Income is declining . Property values have increased faster than inflation . Real Retail sales per capita are flat . Revenue: . Property taxes have grown faster than inflation . Partially offset by reductions in tax rates . Franchise fees are flat, but for changes in rates . General Fund is relying to a greater extent on transfers from the Enterprise Funds . General Revenue base is not keeping pace ,--- .' , CIty of Long Range Financial Trends Summary . Expenditures . Overall growth exceeds inflationary pressures . Staff has grown in targeted areas . Cost of Benefits has grown . Contractual Services expense has grown .Interfund transfers have increased in the enterprise funds . Capital Re-investment has declined . Both cash and debt financed. . Debt Service Expenses have declined