Page 120 - City of Westlake FY20 Budget

Section 2 Financial Analysis

Forecast Overview

Multiyear planning is a key component of Westlake’s financial principles. Without proper planning, multi-
year sustainability would not be attainable.

With these priorities in mind, the Town approaches multiyear planning from these perspectives:
• First, as it relates to revenue, effective economic analysis is essential to accurate forecasting.
Various data on local economic information is used when projecting revenues for the budget. This
data includes economic indicators such as interest rates, wages, health care costs, consumer
spending, and housing and commercial growth. The data gathered from these sources are used to
create financial scenarios for stronger current budget
decisions. KEY REVENUE DRIVERS
• On the expenditure side, the operational impact of Tax Rate
projects and programs have been identified and Net Taxable Value
incorporated into the budget and a multi-year analysis has Sales Tax
been completed to confirm the sustainability of the Mixed Beverage Tax
budget over time. Franchise Fees
Licenses & Permits
One of the goals for the budget is to anticipate and make Charges for Services
deliberate decisions to reach financial and service goals. These Intergovernmental Revenues
trends are graphed and provided as a part of this budget’s support
materials to provide a deeper understanding of the Town’s overall Fines & Forfeitures
financial condition.The Long-Range Financial Forecast takes a Interest Income
forward look at the Town’s revenues and expenditures. It sets the stage for the budget process, facilitating
both Council and staff in establishing priorities and allocating resources appropriately.

Forecasting gives the Council time to strategize as to course we
may want to make financially, both in the short and long term. To KEY EXPENDITURE DRIVERS
maximize the benefit of long-range planning, Council has Overtime Costs
established the following goals: Operating Supplies
• Sustain existing programs at high service levels. Apparatus & Tools
• Maintain a healthy General Fund balance of at least 180 Motor Vehicle Fuel
operating days annually. Maintenance
• Maintain competitive employee compensation within 3% Travel, Training & Dues
of the median for the market. Utility Costs
• Provide adequate and stable funding for street and facility Professional Services
maintenance projects. Insurance Costs
Fleet Replacements
Its purpose is to identify financial trends, shortfalls, and issues so Capital Equipment Replacements
the Town can proactively address them. It does so by projecting
out into the future the fiscal results of continuing the Town’s current service levels and policies, providing a
snapshot of what the future will look like as a result of the decisions made in the recent past.

The purpose of the forecast is to get an idea (based on conservative assumptions) regarding what will
happen in the regional and state economy, and on near-term and long-term revenue and expenditure
drivers during the five (5) year planning period. The term “conservative” used in the context of financial
forecasting means revenues are forecast at low growth levels or even at a decline (depending on the
revenue source).

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