MANAGEMENT’S DISCUSSION AND ANALYSIS

TABLE 6 – Outstanding Long-Term Liabilities

Current Issues

 Economic Factors and Next Year’s Budget and Rates

Today, the population for the City of Fayetteville is estimated to be 16,124. This growth has been reflected in the City’s General Fund revenues, which have increased from $3,840,328 in 1994 to $9,642,409 in 2012. The economic condition and outlook of the City is beginning to show slight improvement in residential construction, purchasing by City residents, and the loss of jobs and employment in our area has stabilized.

The City has been experiencing much slower growth in revenues, particularly property taxes and building related fees. Our local option sales taxes are beginning to increase which is a direct reflection of our area’s slow recovery from the recession. Our operating expenses have continued to increase, mainly due to providing competitive salaries and increasing health insurance benefits. Additionally, our debt service expenses have increased as a result of much needed equipment replacement and facility upgrades.

Staff has developed a Five-Year Plan that includes Workload Indicators and Trend Analysis to assist the City in long-range financial planning and forecasting. This plan is developed with input from each department and is updated annually to reflect any changing needs. This plan is a very conservative forecast of the City’s financial resources and departmental needs to maintain our existing service levels to the community. The Mayor and Council and staff will need to continue to closely evaluate the service and staffing levels on an ongoing basis to ensure that adequate personnel resources and financial resources are available to achieve the desired service levels.