This thesis explores multi-year revenue and expenditure forecasting as a financial management tool available to small municipal governments. A generalized approach for developing a multi-year forecasting process is presented, together with a multi-year revenue and expenditure forecasting model for the City of Monterey, California. The Monterey model includes an econometric approach for projecting revenues, while the expenditure forecast is based on a deterministic approach. Suggestions for forecast presentation, an approach to model updating, and a discussion of the interrelationship between the budget formulation and forecasting processes is also presented. (Author).