Question
For this assignment, I want you to imagine - again - that you are a City Manager. Given our 9/14 and our 9/21 class discussion
For this assignment, I want you to imagine - again - that you are a City Manager. Given our 9/14 and our 9/21 class discussion topic (Finance, and the Budget Process), you need to write a policy paper outlining how you plan to address an expected financial challenge for the upcoming fiscal year. Consider the following factors when writing your paper:
- As you and your staff were compiling the Proposed Budget for the coming fiscal year, your Finance Department was notified by the Property Appraiser of the assessed values for all properties within your City limits. Residential property values in your City are expected to decrease for the coming fiscal year. As such, your property tax revenues will be negatively impacted.
- Property taxes represent approximately 50% of your General Fund revenues for your City. Remember, the General Fund is the most "flexible" when it comes to how property tax dollars can be spent vs. other funding sources i.e.: special revenue funds (bldg. permit fees) and enterprise funds (Garbage service fees). The General Fund is the primary funding source for essential services such as public safety, public works, parks & recreation, and libraries.
- Additionally - further compounding the issue - your expenditures for salaries and benefits are anticipated to increase due to collective bargaining agreements with various labor unions, and contractual agreements for services such as mowing of parks.
You must balance the budget. What will you do? Explain your course of action.
- Will you propose a millage rate increase? Will you try and make up the difference by cutting costs/services? Will you do a combination of these two?
- The chart below provides a financial summary of the issues. Remember, the millage rate calculation is: Assessed value * millage rate / 1,000.
| FY2023 | FY2024 | Difference | |
| Assessed Values | $3,000,000,000 | $2,500,000,000 | ($500,000,000) |
| Current Millage Rate | $3.9947 | $3.9947 | |
| Tax Revenue | $11,984,100 | $9,986,750 | ($1,997,350) |
| Salary & Benefits | $10,000,000 | $10,250,000 | |
| Operating Costs | $1,984,100 | $2,250,000 | |
| Total Expenses | $11,984,100 | $12,500,000 | $515,900 |
| Rev vs. Exp DEFICIT | $0 | $(2,513,250) |
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Governing Global Finance
Authors: Michele Fratianni, Paolo Savona
1st Edition
1138742147, 978-1138742147
