Page 32 - Bedford-FY24-25 Budget

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 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 a 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 the 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.

City of Bedford, TX | Adopted Budget FY 2024-2025 Page 32