Page 112 - FY 2021-22 ADOPTED BUDGET

Service Fund from the Stormwater Utility Fund for the payment of debt service principal and interest related to
drainage projects.

EXPENDITURE ASSUMPTIONS

The methodology for determining the level of expenditures throughout the forecast period is basically the same for
all operating funds. Expenditure estimates are developed for each department based on current service levels,
with increases due to inflationary pressures only. All non-recurring capital spending is removed from the forecast
and projected using expert judgment. The only recurring capital outlay reflected in the forecast is the replacement
of Police patrol vehicles each year in the General Fund.

Population Projections

The population projections, based on the 2010 Census counts and data from the North Central Texas Council of
Governments, used for both revenue and expenditure projections in the Long-Range Financial Forecast are
provided below:

2020-21…………………….24,520

2021-22…………………….24,687
2022-23…………………….24,854

2023-24…………………….24,587

2024-25…………………….25,028
2025-26…………………….25,203

2026-27…………………….25,379

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:

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