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Posted on: April 7, 2022

City of Miami Ranked One of the Highest in State for Overall Financial Health

Perfometer Page 5

(MIAMI, OK.) The City of Miami received the highest score in 10 years using the Performeter, an assessment methodology used by Crawford & Associates, a professional accounting firm, to analyze and report the City’s financial health and success. The score was also one of the highest achieved in the state this fiscal year. Miami received an overall rating of 8.3 on a scale from one the lowest to ten the highest, for fiscal year 2020/2021.

President of Crawford & Associates Frank Crawford presented the results of the financial performance report to the Miami City Council at Monday’s meeting. Crawford’s trademarked Performeter is now used by 100 plus governments across the state and world, in 11 territories on behalf of the U.S. Department of the Interior and is now taught in some colleges. The Performeter has been in use by the City of Miami since 2012.

“Miami received one of the better scores in the state,” Crawford said, “From a financial management perspective this is a well-managed system. It’s a great overall year for Miami.”

The City of Miami was rated and scored in three specific categories: Financial Position 5.9, Financial Performance 10.0, and Financial Capability 7.9. 

“Miami bucked the trend in Oklahoma,” Crawford said. “Most government’s scores have gone down. It’s extremely rare to score a 10, but especially two years in a row to score a 10, is nearly impossible.”

Crawford said the highest overall score achieved this year using the Performeter has been a 9.1 with the City of Miami coming in second.

Crawford stated in his presentation, “The strongest component of the ratings was the City’s financial performance over the past year, which was a perfect score of 10. The City’s financial capability at June 30, 2021 also reflects a well above satisfactory rating, with the financial position rating also being above satisfactory. The 2021 overall score of 8.3 indicates the evaluator’s opinion that Miami’s overall financial health remains well above satisfactory and improved when compared to the overall score of the prior period.”

In past years the City of Miami received an 8.1 Performeter score in 2020, 7.7 in 2019, 7.0 in 2018, 6.0 in 2017, 7.7 in 2016, 8.0 in 2015, 7.6 in 2014, 6.7 in 2013 and 7.4 in 2012. 

Crawford reports an unassigned fund balance of the General Fund of $1.4 million or 16 percent of revenues, considered to be above satisfactory. 

The condition of the City’s capital assets scored low indicating on average a little less than one third of their useful lives remaining. The debt to asset ratio rating of 4.6, or a little less than two thirds of the City’s $88 million in total assets is funded with debt or obligations. These scores are part of the evaluation of the City’s Financial Position, or a “point-in-time’ measure of financial status, solvency, and liquidity. 

Crawford said the City of Miami’s Financial Position lower overall score of 5.9 was due mainly to absorption of liabilities such as the State’s underfunded firefighters’ pension because of City participation, something out of the City management’s control. But Crawford said the score is comparable to other cities of this size.

“The size of the liability the City has to assume from the State is harder for smaller cities,” Crawford said.  

The City’s Financial Performance score of 10 is an illustration as to the City’s financial position and how it compares to past years. For the year ending June 30, 2021 the total net position increased by $7.5 million, or 21.8 percent from the prior fiscal year. The inability of Oklahoma municipalities to levy a property tax for City operations means the City is highly dependent on sales and use taxes. With sales tax collections increasing 16.4 percent from the prior year or per one cent in the amount of $332,795 the rating came it at a 10. The City’s sales tax rate of 3.5 percent has been the same since 2012.

According to Crawford, the City of Miami is doing excellent in cost of services giving tax and rate payers $1.22 in provided services for every dollar paid in expenses. In business type activities consumers receive $1.37 in services for every dollar paid into utilities and fees.

The City’s Financial Capability score measures the government’s ability to obtain resources in the form of revenues, or borrowings to finance services. The City’s revenue dispersion reported shows the City of Miami relies 69.2 percent on service charges, 21.8 on taxes, and 9 percent on other revenues. 

Crawford said Miami has an average sales tax rate at 3.65 percent and very healthy revenue dispersion. He said, “It’s one of the better scores we’ve seen in the state. In most governments sales taxes are usually more dominant and they are left at the sales tax revenue’s mercy. Miami relies more heavily on mostly utility income which is more sustainable and controllable in times of economic crisis.”  

 

The City’s debt service load scored well above satisfactory indicating that for every dollar the City of Miami spent on non-capital items, only 10 cents of that dollar was used for debt service, or of $35 million, $3.6 million were payments for principal and interest on long-term debt. The City of Miami has reported no general bond debt since 2012 and receives no tax revenue through property taxes as allowable by Oklahoma law, leaving the ability high to issue a general bond if needed. 

Miami’s City Manager Reese said, “The Performeter gives me the ability to see how we have performed year after year and it’s a tool we can come back to when evaluating financial decisions.”

 

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