CC Minutes 04/25/2011 Workshop - Laserfiche WebLink

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FY 2011/12 Budget Assumptions INTRODUCTION This general fund forecast for the City of Casselberry has been prepared as a tool for understanding the future course of the City budget, given certain assumptions about growth in the revenues and expenditures that comprise the general fund and economic conditions. The General Fund pays for the majority of the service delivery of the City. The fund supports public safety, recreational programs, planning and zoning, general government and transportation management. Fiscal year 2010/11 reflects the adopted budget while projections for 2011/12 through 2020/2021 have been prepared based on a long slow economic recovery. The forecast anticipates further declines in taxable values for fiscal year 2011/12 and sub -par revenue growth for all other revenue sources. Modest growth in property value returns in fiscal year 2014/15 and thereafter. The projections are modeled so that assumptions may vary each year to reflect future actual impact of the business cycle and other anticipated or possible events. Additionally, the model is designed to allow the underlying assumptions to change so that sensitivity analysis can be performed to demonstrate the implications of changing underlying assumptions. Major assumptions are outlined to ensure a clear understanding for the basis of the results. The number of assumptions is intentionally limited so that the risk of inconsistent assumptions being used to drive the forecast is limited. Consistent with the forecasts model's design, surpluses and deficits build over the forecast period. Surpluses and deficits are cumulative in the sense that any current year surplus or deficit will flow into the next year's fund balance, thus carrying a current year's balance forward. In using the information contained in this projection, it is important to understand that an indicated surplus or deficit reflects the model's economic assumptions and shows what could happen in the absence of policy direction to cut costs or increase funding. Developed surpluses or deficits are allowed to accumulate over the forecast period. In reality, management will seek to submit a balanced budget subject to City Commission direction, so interim steps would be taken to prevent any reserve deficits from coming to actual fruition. The purpose of utilizing a fund forecast is to determine the extent of actions necessary to close the gap between revenues and expenditures, ensuring long term sustainability. The forecast is incorporated in the Commission's routine decision making process to demonstrate the potential long range impact of various courses of actions being considered by the Commission. Benefits can accrue from external users as well. City of Casselberry Page 1