After the jump, a quick look at this year's Comprehensive Annual Financial Report (CAFR).
From the 2012 CAFR:
The CAFR advises that indicators other than net assets should be taken into consideration, too, and goes into mind-numbing detail for 138 pages. But let's look at that bottom line figure, net assets, and how it has increased and decreased over time.The Statement of Net Assets presents information on all of the City's assets and liabilities, including capital assets and long-term obligations. The difference between the two is reported as net assets. Over time, the increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
Source: City of Richardson.
|Net Assets (in thousands)|
After peaking in 2007 at $220,951,000, net assets have decreased five straight years and now stand at $182,418,000, a decline of 17% from its 2007 high. The CAFR suggests that a decline in net assets may serve as a useful indicator that the financial position of Richardson is deteriorating.
Yet if you read the city's announcement of this, you'd think that the important thing is that the auditors did not identify any irregularities in the city's accounting practices. It's as if Jerry Jones recapped the Dallas Cowboys 2012 season by praising the team statistician for the accuracy of the team stats without once mentioning that the team failed to make the playoffs.
I mean, sure it's good that the city didn't muck up reporting how its financial position might be deteriorating. But it would be more comforting if the city either highlighted the details that explain why the city's financial position is not, in fact, deteriorating, or highlighted the steps the city is taking to restore the city's financial position to one that's improving.
The bottom line? The city has served up a weak cup of CAFR.