Page 100 - Benbrook FY20 Approved Budget

CITY OF BENBROOK 2019-20 ANNUAL BUDGET

GENERAL FUND

As previously stated, one of the methods used to project operating expenditures is to develop separate inflation rates for a variety of line
item expenditures. The inflation rate is then applied to the projected expenditures. The flaw in this approach to forecasting is that expenditures
are often forecast before they occur and consequently the ending fund balances may be artificially reduced. The City applies a second
expenditure forecasting method of using per capita expenditures applied to the projected population estimates. The major drawback to this
approach is using past trends, that may or may not be reliable, to predict the future. This methodology does produce relatively consistent
computations, in that the City's per capita spending has remained constant over the past ten years. When either of these two methods does
produce numbers that are inconsistent with the forecast, the City Staff uses expert judgment to establish projected expenditure levels.

The forecast is predicated on the following expenditure assumptions for the General Fund:

1) City services, programs, and the number of employees remain at the level presented in the 2019-20 Budget.

2) Increases in salary are computed on cost-of-living adjustments based on the projected increase in the employment cost index and
consumer price index.

3) Costs of insurance (health, dental, life, workers' compensation, and unemployment) premiums increase at rates similar to those
experienced over the past ten years; the 2019-20 total includes funds for an up-to twenty percent increase

4) TMRS costs for future years of the forecast reflect increased contribution rates due to additional retirees as the City's work force ages.

5) Costs of other fringe benefits (FICA, overtime, stability/longevity pay, and incentive pay) increase at the projected rate of salary
adjustments.

6) The volume of supplies and materials remains at the same level of use; costs increase at the projected level of inflation.

7) Contractual services increase in costs depending on assorted inflation factors, utilities increase based on historical trends, fuel costs
increase based on wholesale prices of gasoline and diesel, and other contractual services increase based on inflation.

8) Repair and maintenance costs increase based on historical trends and inflation.

9) Capital outlay funds to replace four Police vehicles (through the General Fund) are included in each of the forecast years; costs
increase according to projected inflation levels.

10) Debt Service costs reflect current obligations including: general obligation debt issues approved by Benbrook’s voters, general

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