Following is selected information from the City of Harrisburg, Pennsylvanias 2008 CAFR. The boxed information represents the

Following is selected information from the City of Harrisburg, Pennsylvania’s 2008 CAFR. The boxed information represents the first four paragraphs of the introductory letter the mayor of Harrisburg included with the CAFR. Subsequent to the mayor’s remarks are two bar charts from

the 2008 MD&A that provide trend information on the city’s net position (net assets). Finally, a table provides trend information on two debt performance measures found in the statistical section of the 2008 CAFR.

Required
a. The statements by the mayor indicate that Harrisburg is a city in renewal while other cities are facing decline. Additional statements point out that evidence of Harrisburg’s renewal is found in the many awards it has received.
Discuss whether receiving the GFOA Certificate of Achievement for Excellence in Financial Reporting is an indicator of financial performance.
b. Based on the financial information provided, do you agree with the mayor’s statements about Harrisburg? Discuss why or why not.
c. On September 8, 2010, The Wall Street Journal announced that Harrisburg would default on its bond payments. Based on the limited information you have been provided, discuss whether it appears there was adequate information in the CAFR for an astute reader to anticipate thedefault.

Transcribed Image Text:

Calculated Value for Each Year 2003 2004 2005 2006 2007 20018 Performance Measure 0.81 Debt Service Coverage Bonded Debt per Capita $1,992 $1,992 $1,970 $1,948 $1,879 $1,937 1.14 0.68 0.43 0.45 0.55