Payneway is a hypothetical medium sized municipal government in southwestern Michigan with a population of 31,000.   Due to years of financial improprieties, poor financial management, and severe scandals, the municipality has no idea how much revenue it brings in annually or how much expenditures it spends on a yearly basis.

You have just been hired as the city manager of Payneway. One of your first tasks is to develop a list of the major revenue sources in Payneway. Your final list includes the top 10 revenue sources for the municipality:

            Source                                                                         Annual Revenue for 2015-2016  

            Revenue Sharing from the State (unrestricted)                     $4,500,000

            Federal Aid (restricted to public safety operations)              $3,000,000

            City Income Tax                                                                      $1,100,000

            Garbage Collection Fees                                                         $800,000        

            Water Distribution Fees                                                         $550,000

            Sewage Fees                                                                           $450,000

            Police Tickets                                                                          $200,000

            Parking Meter fines                                                                $80,000

            Parks Admission Fees                                                             $45,000

            Building Inspection Fees                                                        $10,000

After examining expenditures, you determine that the city had a total amount of expenditures of $10,999,990 for 2015-2016. Those expenditures were devoted to the following Departments/Sources:

            Department/Source                                                   % of Expenditures for 2015-2016

            Police Department                                                                 30%

            Fire Department                                                                     18%

            Police/Fire Retirement Program                                            12%

            Debt Payments for Water/Sewer System                              15%

            Debt Payments for New City Hall (built in 2000)                   15%

            Salary Costs for all other Employees                                      8%

            Supplies & Expenses for all other Programs                          2%

Based on ideas discussed in the course materials, identify an effective budgeting system that could ethically and effectively control revenues and expenditures so that future financial management improprieties do not occur. Additionally, based on data presented, what other budget challenges do you still have to solve as city manager? Develop a plan to solve those challenges.