FY2016-17 Budget Final

City of DeSoto Five-Year Financial Forecast FY2017 – FY2021

Introduction Long-range forecasting of annual budget priorities creates a framework for evaluating budgetary impacts, building a baseline for measuring effects of decisions, reviewing economic effects on funding scenarios, and provides an understanding of revenue and expenditure projections. The financial forecast does not present a 5-year budget or plan for the City. Forecast models are not absolute predictions of the future, instead are projections of possible outcomes based upon a set of variables and assumptions to evaluate annual decisions. This financial forecast is the first framework that will be evaluated and updated yearly.

1.

Economic outlook:

1.1 Population The City of DeSoto population grew from 37,646 in 2000 to 49,047 in 2010 according to the U.S Census, and is currently estimated to be 51,483. The City’s past growth rate can be the best indicator of future growth rate. The following table shows DeSoto’s population, percent change and compound annual growth rate by decade. The city experienced a large population growth from 1980 to 1990 and has grown at consistent rate since 1990.

Year 1980 1990 2000 2010

Population Change

% Change

Compound Annual Growth Rate

15,538 30,544 37,646 49,047

-

-

15,006

96.58% 23.25% 30.28%

6.99% 2.11% 2.68%

7,102

Source: US Census

11,401

3.93%

The city is currently 75 percent built-up, leaving approximately 25 percent of land area of the community to be developed. This means that DeSoto has currently reached 65 percent of its build-out, or ultimate, population of approximately 78,000 persons. Assuming a conservative growth rate of 1.5 percent, DeSoto is expected to reach its ultimate capacity after 2040. It is important to keep in mind that population projections are subject to change and can be impacted by number of factors such as the local and national economies and the real estate market. 1.2 Housing and Real Estates The number of new single family homes is a major indicator of growth. It provides insights about rate of potential growth in tax revenue and revenue from charges for services, franchise and utility fees.

This number has declined during the recession period between 2007 and 2009. The number of single family homes permits issued has increased on average from 141 units in year 2010 to 161 in year 2014. The City of DeSoto new home construction has followed the Dallas County trend closely as demonstrated in the following chart. In 2015, 270 new houses were permitted in the City, an increase of 61% from the previous year’s figure. Texas Comptroller of Public Accounts' Texas Transparency

Units In Single Family Structure

10,000

500

8,000

400

6,000

300

478

4,000

200

230

2,000

100

141 94 141 142 112 140 161

0

0

2006 2007 2008 2009 2010 2011 2012 2013 2014

DeSoto

Dallas County

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