HOMEWORK ASSIGNMENT TWO

On the basis of what we prepared in class, please prepare a cash flow analysis for the Parks and Recreation Fund and the Motor Vehicle Fund, according to the instructions, using the data provided in the exercise.

Grantsville is a medium sized midwestern town, not quite rural, not quite urban and not quite a willing participant in the twenty-first century. As the new clerk-treasurer, you are eager to bring new aggressiveness to the city administration, so long as none of the Old Guard gets mad.

You suspect the development of a cash plan and a short-term investment strategy for the city would be a non-irritating first step. You further believe that an appropriate start would be with the four two of the four largest funds in the city financial structure: parks and recreation and motor vehicle funds. (You do not need to be concerned about the cumulative capital development fund and the general fund.)

You are encouraged to use the excel spreadsheet resource called Cash Flow Gen Fund Drill for V560. Again, you are required to prepare the cash flows for only the Parks and Recreation and Motor Vehicle Highway Funds.

Fund balances for January 1:

Parks and Recreation Fund $ 62,968

Motor Vehicle Fund $102,015

REVENUES:

Property Tax Collections: Received on May 1 and November 1

Owing to discount for early payment 5/8ths of the collections come in May.

Delinquency has historically be about 2 percent of the levy.

Levy:

Parks and Recreation Fund: $ 718,300.00

Motor Vehicle $ 0.00

Other revenues:

Parks and Recreation Fund

Swimming pool admissions Community auditorium rentals

May $ 800.00 July 4 Freedom Show $ 800.00

June $ 950.00 Labor Day Customs Show $1,500.00

July $1,750.00 Casual Rentals $150 per month

August $2,500.00

September $ 750.00

Motor Vehicle Fund

State shared motor vehicle taxes Traffic Fines remitted monthly $6,500

March 31 $114,000 (Only half of the amount goes to Motor Vehicle)

June 30 $125,000 (Only half of the amount goes to General)

September 30 $115,000

December 31 $113,000

EXPENDITURES:

Payrolls: Assume that there are 26 paydays a year in the bi-weekly system.

For the months of July and October, there will be three paydays. All other months there will be two.

Parks and Recreation Fund

Regular payroll $15,000 bi-weekly

Temporary expenses (payroll) seasonally paid: (From May 15 through September 10) (The payroll pattern is the same as described for all payrolls except for May and September there is only one payday)

Lifeguards, playground help, etc. $20,000 biweekly

Motor Vehicle Fund

Temporary expenses (payroll) seasonally paid: (From May 15 through September 10) (The payroll pattern is the same as described for all payrolls except for May and September there is only one payday)

Summer help. $10,200 biweekly

Vendor payments: Assume there are no more than the two alternative Thursdays a month for the payment of vendors.

Parks and Recreation Fund

Standard vendor payments $4,000 per disbursement

Additional summer vendor seasonally paid: (From May 10 through September 15) (The vendor payment pattern is the same as described for all regular vendor payments except for May and September there is only one Thursday for payment)

Seasonal vendor payments $3,000 per disbursement

Motor Vehicle Fund

Standard vendor payments None

Additional summer vendor seasonally paid: (From May 10 through September 15) (The vendor payment pattern is the same as described for all regular vendor payments except for May and September there is only one Thursday for payment)

Seasonal vendor payments $7,000 per disbursement

Special Expenditures:

Motor Vehicle Fund

Purchase of Dump Truck with sand-salt distributor and snowplow

Paid on October 1: $34,000

Once completed, students are to turn in the cash flow worksheet and the responses to the questions set forth below:

• From these data, prepare a cash flow (budget) for the year. Pleases show and include the year-end balances for the Motor Vehicle Highway Fund and the Park and Recreation Fund.
• Estimate what amounts are available for investment and what fund shortages will occur (if any).
• Identify any management strategies to prevent the fund shortages if possible.

Here are the matrices that you will use:

Cash Flow Study GRANTSVILLE MIDWEST Balance: PARKS and RECREATION Receipts: Property Taxes pool admissions AuditoriumRentale Casual Rentals Total: January $0 $0 $ February $0 $0 $ March $0 $0 $ April $0 $0 $ May $ $0 $0 $ June $0 $0 $ July $0 $0.00 $0 $ August $0 $0 $ September $0 $0.00 $0 $ October $0 $0 $ November $ $0 $0 $ December $0 $0 $ TOTALS: $0 $0 $0 $0 Assumed Levy: S (adjusted for delinquencies) DLGF Approved LEVY: $0 Revised: FY 20XX $0 Net Income FY 20XX $0 Revised Appr 98% of Levy SO Estimate of Cash Flow Park and Recreation Fund of the Town of GRANTSVILLE What is available for investment? 0 What is the ending balance? $0 Fund shortages? In the months of February, March April, September, October Strategies? Can receive a loan for the shortages in the beginning of the fiscal year Disbursements Total: Payroll SO SO SO SO $O SO SO SO SO SO SO SO $0 $0 Vendors SO $0 SO SO SO SO SO SO $0 $O SO SO SO SO $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 SO $0 $0 $0 $O $0 $0 $0 $0 $0 $0 SO $0 $0 $0 $0 $0 SO $0 $0.00 $0.00 Cash Flow Study GRANTSVILLE MIDWEST Balance: PARKS and RECREATION Receipts: Property Taxes pool admissions AuditoriumRentale Casual Rentals Total: January $0 $0 $ February $0 $0 $ March $0 $0 $ April $0 $0 $ May $ $0 $0 $ June $0 $0 $ July $0 $0.00 $0 $ August $0 $0 $ September $0 $0.00 $0 $ October $0 $0 $ November $ $0 $0 $ December $0 $0 $ TOTALS: $0 $0 $0 $0 Assumed Levy: S (adjusted for delinquencies) DLGF Approved LEVY: $0 Revised: FY 20XX $0 Net Income FY 20XX $0 Revised Appr 98% of Levy SO Estimate of Cash Flow Park and Recreation Fund of the Town of GRANTSVILLE What is available for investment? 0 What is the ending balance? $0 Fund shortages? In the months of February, March April, September, October Strategies? Can receive a loan for the shortages in the beginning of the fiscal year Disbursements Total: Payroll SO SO SO SO $O SO SO SO SO SO SO SO $0 $0 Vendors SO $0 SO SO SO SO SO SO $0 $O SO SO SO SO $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 SO $0 $0 $0 $O $0 $0 $0 $0 $0 $0 SO $0 $0 $0 $0 $0 SO $0 $0.00 $0.00