FY2016-17 Budget Final

City of DeSoto Five-Year Financial Forecast FY2017 – FY2021

2. Revenue Analysis: Forecasting revenue is based on analysis of historical trend, current circumstances and assumptions based on foreseeable economic trend. The forecast takes into consideration the changes in revenue pattern over the past ten years. The historical data period covers the economic recession and the recovery stage where more consistent revenue patterns became more noticeable. As a result the forecasted growth rate for revenue is considered to be a more conservative forecast. A number of economic indicators, which include Consumer Price Index (CPI) and Gross Domestic Product (GDP), were considered in order to assess the overall economic trend. 2.1 Revenue Forecast Assumptions: The Long Range Financial Forecast is based on different assumptions that were used to build the forecast model. These assumptions are subject to change when the plan is reevaluated or is compared to actual data in the future. Changes to assumptions may also happen if new financial policies are introduced in the future. The base point for the modeling in the plan is the actual data for FY 2015. 1- Population growth at a steady rate of 1.5% 2- Tax rate will be continually reduced to 0.7399 and maintained the same for five years. 3- Taxable property value will appreciate at a 1.84 percent rate annually. 4- Non-Property taxes are expected to grow annually at 4.72 percent on average. 5- Water rates will be maintained at the same level. 6- The City of DeSoto is planning to issue $32,000,000 in bonds for the next five years to finance capital improvement projects. 2.2 Revenue Trend Analysis: The following table and charts show a comparison of revenue for FY2011 and FY2015. The percentage of revenue derived from taxes (sales and property) remained around the same average representing about 40 percent of the total revenue. There is a slight change in the percentages of the major types of revenue sources. Revenue from Miscellaneous sources has increeased by three percent, miscellaneous resources include fines and forfeitures, licence and permit fees and hotel taxes. Total revenue has increased by 17.24 percent from $69,370,925 to $81,332,587. The following assumptions were used to build the forecast model:

Revenue Type

FY 2011

FY 2015

Change Percentage

CHARGES FOR SERVICES

$ 23,521,487 $ 21,725,840 $ 5,897,100 $ 4,027,283 $ 14,199,217

$ 26,173,030 $ 23,335,606 $ 8,361,687 $ 4,650,312 $ 18,811,951 $ 81,332,587

11.27%

PROPERTY TAXES

7.41%

SALES TAXES

41.79% 15.47% 32.49% 17.24%

UTILITY FRANCHISE FEES

MISCELLANEOUS

Total

$ 69,370,925

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