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the past ten years is used to make revenue forecasts. Since there are obvious drawbacks in relying on past trends
to predict future patterns, the projections also include adjustments based upon the opinions of several department
heads.

The per capita method of forecasting revenues involves the development of long-range population projections for
the City. The current year's revenue is divided by the current population to get a per capita revenue amount. Per

capita revenue amounts are then applied to the projected rate of inflation and the projected population to compute
the estimated revenue in each of the future years. Again, this method uses experience to project future trends.
The opinions of the City's department heads are also factored into this approach before finalizing these projections.

EXPENDITURE METHODOLOGY

In addition to each of the revenue forecasting methods explained above, Benbrook's financial forecast for
expenditures includes a combination of the incremental and deterministic forecasting models. The following
summary outlines the major characteristics of the expenditure portion of the forecast.

1) The expenditure forecast assumes "a constant level of services" that accounts for inflation but ignores
service enhancements.

2) The forecast does not allow for personnel increases based on projected population increases but does
include salary adjustments based on the projected rate of inflation.

3) The forecast separates expenditures into a variety of line items, and projects those expenditures based on
a separate set of inflation factors or rates.

4) The forecast includes operational and maintenance costs associated with new capital facilities.

These revenue and expenditure forecasts combine to form the basis of a comprehensive financial condition analysis
of each of the City's operating funds.

FORECAST ASSUMPTIONS

REVENUE ASSUMPTIONS

The General Fund and Debt Service Fund revenues are projected by using the following methods: the Budget is
adjusted annually, according to the projected rates of inflation for each year, expert judgment is used to project
the line item revenues, and the 2025-26 Budget is adjusted to correspond with projected increases in the City's
population. All revenue projections are based on the current fee structures. Any changes in fee structures could
dramatically affect the outcome of the financial forecast.

Property Tax Collections

Property tax collections are projected using the following assumptions and methodology:
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