Financial Planning
Long Range Financial Outlook
The purpose of a long-range financial outlook is to provide a key tool for planning and strategizing. The City of Roswell develops a five-year forecast each year during the budget process that considers future scenarios and serves as a guide to staff and Mayor and Council to help make financial decisions for the fiscal year. It reflects the city’s commitment to fiscal health and stability.
The Office of Strategic Planning and Budgeting has led the development of the long-range financial planning for the City of Roswell. The five-year forecast is updated each year using assumptions about economic conditions, spending scenarios, and other variables. It is a collaborative process involving many discussions between staff, citizens and elected officials. During the budget process, budget information or trends is presented to Mayor and Council at various worksessions. Finance staff provide revenue estimates.
Economic Outlook for Georgia
- Economy on track to exceed pre-pandemic peak by the end of 2022
- GDP projected to grow by 4.3% in 2022
- Jobs count expected to exceed pre-pandemic count in 2022; average unemployment of 3.2%
- Risk of economy entering a recession is about 20%
- Job growth, higher wages, and savings will drive consumer spending
- Businesses expected to increase spending on new technology and equipement by 6%
- Desire for bigger homes and private spaces driving home prices and home building
- Economy challenged by supply and labor shortages, further fueling inflation
- Pandemic risk to economy is low
Source: UGA’S Georgia Economic Outlook (Terry College of Business)
FY2023: Budget Work Session: Economic Outlook & Five Year Forecast
(February 14, 2022)
The recording of the worksession is available on the City of Roswell website, YouTube and Facebook (interactive version: video embedded on right).
The Economic Outlook and 5 year Forecast are presented at the beginning of the budget process. These scenarios present the current status, market economic projections, and various decisions that might affect the revenues and expenses of the City over the next 5 budget cycles.
It is important to realize, the projections represented in a forecast are subject to change as real data over time, real economic changes to the market and the decisions or choices change. The forecast shows an estimated size of budget based on the assumptions shown for that scenario. There are many decisions made during the budget process to balance the budget. The forecast projections include cost escalations for expenditures and estimated market growth to revenues to accurately represent the reality the City will face if no further budget modifications are made.
The chart below shows the assumptions that were made for the five year forecast.
Assumptions:
Other Revenues – projections based on rate of inflation
Operating Expenses
- Assumes continuation of current service level
- Includes final full year adjustment from the Class and Compensation Study (shown in FY 2022 Approved Budget)
General Fund - Revenues vs Operating Expenditures
The General Fund five year forecast shows that the fund can sustain at the existing service levels and estimated revenue. This chart is comparing recurring revenue with recurring expenditures. Other Revenue /Spending considerations were shown in purple below. The one time capital expenses are funded through fund balance or by other methods, such as debt or TSPLOST tax.
Enterprise Funds
5 year forecasts were also presented for Water and Sewer Fund, Solid Waste Fund, and Stormwater Fund. Since these funds are enterprise funds, the capital amounts are included.
Water and Sewer Fund
Assumptions:
- Revenues are grown by 4% for FY 2023 – FY 2024, as per the current approved rate increase, and by 4.5% for FY 2025 - FY 2027
- Forecast also includes revenues from Meter Sales and Capacity Fees and increase in sales from new growth and development
- Operating Expenses are grown by CPI
- Forecast includes the adjustment from the Class and Compensation Study
Water and Sewer Fund - Revenues vs Expenditures
The Water and Sewer Fund five year forecast shows that the fund can sustain at the existing service levels and estimated revenue.
Solid Waste Fund
Assumptions:
- The revenues are grown by 5% for FY 2023 – FY 2024, previously approved at 3%.
- The forecast also includes revenues from new growth and development.
- Operating Expenses are grown by CPI.
- Forecast includes the adjustment from the Class and Compensation Study
Solid Waste Fund - Revenues vs Expenditures
The Solid Waste Fund five year forecast shows that the fund can sustain at the existing service levels and estimated revenue.
Stormwater Fund
Assumptions:
- The revenues are grown by 4% rate increase for FY 2023 through FY 2024 previously approved at 2.5%
- Operating Expenses are grown by CPI
- Forecast includes the adjustment from the Class and Compensation Study
Stormwater Fund - Revenues vs Expenditures
The Stormwater Fund five year forecast shows that the fund can sustain at the existing service levels and estimated revenue.
The Proposed Budget includes a rate increase of 16.5% following discussions during the budget process. The additional rate increase proposed will allow the department to address stormwater project backlog more aggressively while also maintaining an adequate reserve to handle emergency projects that may arise.