Question
The City of Big Boot approved its budget for calendar year 2019. In that budget, the annual appropriation for salaries in the General Fund is
The City of Big Boot approved its budget for calendar year 2019. In that budget, the annual appropriation for salaries in the General Fund is $6,000,000. At the end of June 2019, the General Fund reported salary expenditures well over $3,000,000. Assuming that the City incurs salaries ratably throughout the year and does not hire extra personnel, for example, for summer services, what actions could the City take in light of actual salaries expenditures at June 30.
A) place a freeze on new hiring so that general fund vacant positions could be monitored and managed to ensure salaries do not exceed the annual appropriation.
B) do nothing assuming that the city can use up some of the positive unassigned general fund balance that existed at the end of 2018.
C) set up a task force to consider what new revenue sources the city could create to make up for the inevitably higher salary expectations.
D) ask current employees to take pay cuts in the second half of the year.
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