Page 32 - Bedford-FY22-23 Budget
P. 32

General Fund Forecast


































            PROCEDURE
            As part of the budget process, staff presents the City Council with a long-range forecast model to provide a
            better understanding of the impact of budget decisions in the upcoming  scal year. The forecast model serves
            as a tool for sound decisions, accurate projections and  nancial management of the City’s General Fund. The
            model calculates, predicts, and offers a visual snapshot of the City’s General Fund  nancial position for the next
             ve  years.  It  is  dynamic  and  staff  can  adjust  as  new  revenue  and  expense  data  becomes  available.  More
            importantly, the model is used to evaluate the future impact of hypothetical changes that can cause short or
            long-term problems. The model enables informed decision making by showing both the short-term and long-
            term  affordability  of  those  decisions.    The  long-range  plan  is  updated  during  the  discussions  with  the  City
            Council as part of the budget process.

            METHODOLOGY
            The model highlights historical revenue and expenditure trends from the previous  ve years to form predictive
            behavior  of  certain  budgetary  line-items.  Therefore,  based  on  certain  trends,  the  model  includes  many
            assumptions.

            The  General  Fund’s  major  revenue  sources  include  property  taxes  and  sales  taxes.  Each  of  these  revenue
            sources are driven by the growth of the local economy and the City’s population. This is also true of a number of
            the  City’s  other  revenue  sources  including  fees  and  charges  for  service,  franchise  taxes,  and  licenses  and
            permits.  The  revenue  projections  presented  in  the  forecast  use  line  item  summary  of  City  revenue.  These
            projections are based on an analysis of at least 5 years of historical trends for each revenue line item, as well as
            the effects of current economic conditions and projected economic activity.

            Property taxes, the City’s largest revenue source, are based on the tax rate adopted annually by City Council as
            applied to the certi ed property rolls prepared by the Tarrant County Appraisal District. The rate is composed of
            two parts; the  rst to support general City operations through the General Fund and the second part to pay
            principal and interest on tax-supported bonds through the Debt Service Fund.

            Property values are projected to increase an average of 3.0% from FY 2024 – FY 2028. This will drive the actual
            property tax rates that will be proposed in the next  ve years.

            Sales tax projections have moderate increases built in over the next  ve years, with 5% estimated for each of the
            next   ve  years.    This  re ects  the  City's  status  of  being  almost  fully  built  out  and  sales  tax  potential  being
            dependent on redevelopment and economic conditions.  It also takes into account recent new businesses that




                City of Bedford, TX | Adopted Budget FY 2023                                                Page 32
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