Strong Fiscal Management
At
the heart of the County's stability - even in times of uncertainty - is its
fiscal discipline and systemic financial planning and monitoring. It is
important for the County to have strong fiscal management to ensure the County
can continue to provide core services and the mix of other services sought by
members of the public. In part, strong fiscal management tracks a few key
indicators the operating ratio and the debt ratio.
Operating Ratio
The
operating ratio demonstrates the ability to generate revenues to fund current
or desired service levels. A ratio of 1:1 or higher indicates budget solvency.
The ratio is measured by comparing audited General Fund expenditures to audited
General Fund revenues. The measure focuses on the General Fund as it is the
County's chief operating fund.
Source: County of San Diego Comprehensive Annual Financial Report
Source: County of San Diego Comprehensive Annual Financial Report
Debt Ratio
The
debt ratio shows the County's debt in relation to the revenues each year. This
shows the burden of long-term debt on the County's budget. Generally, a smaller
ratio means that less of the County's resources (revenues) will have to go
towards paying debt - which means more resources for other needed programs that
the County provides to the public. This
ratio is calculated by comparing annual principal and interest payments on
long-term obligations of the General Fund to budgeted General Fund revenue. The
limit, as set in the County's Administrative code, is set at 5%.
Sources: County of San Diego Operational Plan & Comprehensive Annual Financial Report