Page 91 - Benbrook FY2021

LONG-RANGE FINANCIAL FORECAST

BACKGROUND OF FINANCIAL FORECASTING IN BENBROOK

Benbrook initiated the City's long-range financial forecasting process in 1979 in conjunction with the first of several bond issues. The first long-
range financial forecast provided comprehensive General Fund revenue and expenditure projections but did not analyze the financial condition
of the City's other funds. Subsequent forecasts were expanded to include the City's Debt Service Fund. The current forecast includes the General
Fund and the Debt Service Fund. Capital Projects Funds (Capital Improvement Projects, Special Assessment, Capital Asset Replacement) are not
addressed in the City's forecast since repayment of bonds takes place through the City's Debt Service Fund. Grant Funds and Other Funds (TIF,
Core Value, Stormwater Utility, Police Narcotics, HMOT, and EDC) are not reflected in the Long-Range Financial Forecast. A separate Capital
Improvements Report, required by City Charter to be issued in December of each year, addresses possible Capital Projects Fund expenditures.
All of these documents stress the need for long-range financial planning and each document is used as a tool in planning the budget.

The forecast included in the 2020-21 Budget follows the basic pattern of the previous forecasts. Some sections have been expanded or revised
to include the most pertinent and recent information. The current forecast has been prepared to provide the following six benefits to City
leaders:

1) The forecast can be used by the City Council in orchestrating policy decisions with long-term implications.

2) The long-range forecast can serve as an aid to both elected and administrative officials in anticipating future fiscal problems, so that
strategies can be developed, and action implemented as soon as possible to correct or counteract these potential difficulties.

3) The financial forecast can assist the City Manager as well as City departments in operational planning.

4) The forecast can result in more accurate estimates of revenues and expenditures during the budget process.

5) The forecast can indicate to the bond rating agencies and other interested parties that Benbrook does have a systematic financial
planning process in place.

6) The long-range financial forecast can help the general public understand the long-term costs associated with current and proposed City
activities and issues that may affect the municipal government of Benbrook.

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