FY 2011 Popular Annual Financial Report FY 2011 Popular Annual Financial Report | Page 6

financial
Financial Look Back at 2011 “ Arlington’spractices
management

F

Fiscal year (FY) 2011 began with the theme from the City

are strong, well embedded,
and likely sustainable.

”

City departments were forced to consider alternate revenue

Manager’s Office of “Challenge, Change, Celebrate, Congratulate,

options and expenditure reductions to balance the budget. The

and Consider the Possibilities.” Those concepts certainly applied to

City created a Business Continuity Reserve. The organization was

the City’s finances in FY 2011.

struggling with recurring revenue shortfalls, but had one-time sources

of funds available, partially due to natural gas drilling. To avoid using

Cities throughout the nation were looking for ways to continue

providing services in the midst of an economic crisis. Most of us

one-time money for recurring expenses, the “Challenge Grant”

faced layoffs, employee benefit reductions, and service contraction. In

program was created. Departments were asked to identify programs

looking back, here are some significant events related to our finances

that were least impactful to service delivery and then request

challenge grants to provide interim financing for these programs until

that occurred in 2011.

alternate service delivery models or funding were identified. If the
Challenge

program could not be re-engineered or funded by another source, it

During this fiscal year,

would be eliminated in the FY 2012 Budget.

the entire country

continued struggling

nation faced was maintaining our bond rating during these difficult

with the challenges

economic times. Arlington has traditionally earned healthy bond

of the economic

ratings from Standard & Poor’s, Fitch, and Moody’s. Because we have

downturn. Until

maintained our focus on financial principles and a strong emphasis

now, Arlington had

on the integrity of our finances, we have been able to sustain our

been spared most of

AA+ and Aa1 bond ratings. Standard & Poor’s said, “Arlington’s

the negative effects

financial management practices are strong, well embedded, and likely

of the precarious

sustainable.” According to Fitch, “The City has maintained budgetary

real estate market.

structural balance and sizable operating reserves amidst recessionary

However, that

pressures due to prudent budgeting practices and timely expenditure

changed in FY 2011.

reductions.”

Another challenge that Arlington and other cities across the

In 2010, the City saw
a drop in property

Change

values of about .4

percent; but in 2011,

for the first time. Approximately $25.6 million in revenue bonds was

In FY 2011, the City issued debt for its new stormwater utility

we saw a decline of 5.7 percent or the loss of over $1 billion in

issued for property purchases and construction projects.