Page 90 - Southlake FY22 Budget

CITY PrOFILE

conditions by reducing services, increasing efficiency, raising taxes, or taking some other appropriate action. It also
assumes that public officials have perfect information of the problem, understand the gravity of the situation, and
know how to act in response.

The question most associated with the analysis of this category in regards to its impact on financial condition is, “Do
legislative policies and management practices provide the opportunity to make the appropriate response to changes
in the environment?”

Financial Factors reflect the condition of the government’s internal finances. They are in some regards a result of the
influence of environmental and organizational factors. Financial factors will eventually show signs of cash or budgetary
problems if there is a problem in regards to the previous two factors. The question most associated with the analysis of
this category in regards to its impact on financial condition is, “Is government paying the full cost of operating without
postponing costs to a future period when revenues may not be available to pay these costs?”

Tools of the Financial Trend Monitoring System

The primary tools of the FTMS are the financial indicators. They represent a way to quantify changes in the FTMS
factors. Many aspects of financial condition cannot be measured explicitly; however, quantifying the indicators and
plotting them over a period of years can allow decision-makers to monitor and evaluate the City’s financial performance.
These indicators do not provide answers as to why a problem occurs or how to solve it but do allow for an informed
response. The following pages include a number of charts displaying indicator data that is designed to track the financial
condition of the City across a period of time. These charts examine data ranging from population growth to the use of
revenues and expenditures per capita, all of which help to identify warning signs in the City’s fiscal health that could
lead to future trouble. By keeping an eye on these important indicators, the City can carefully monitor the financial
trends, and make any necessary adjustments in long-range planning to ensure future economic stability.

How is the Financial Trend Monitoring System used?
The City maintains a database of monitored trends that are updated and reviewed annually as a part of the budget
process. By reviewing historical actuals over an extensive period of time, long ago forgotten financial impacts may be
reviewed for validity to current economic conditions and variables. Department staff also utilizes FTMS data to inform
their departmental business plans.

BUDGET BOOK | FY 2022 City of Southlake 89
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