Budget Deficit

Description You are the City Manager of a small city, population 5000. The city is facing a projected $200,000 budget deficit in the current year. Additionally, the city employees are attempting to organize as a chapter of the state public employees union. Further a high profile corruption case is under investigation in the Public Works Department involving the disappearance of equipment valued at $100,000 that must be replaced if it cannot be recovered. The five members on the City Council are requesting your recommended solution to these problems. One council member is related by marriage to the head of the Public Works Department and two others are union members. The Council generally supports budget cuts as long as they are reasonable and well supported. What are your recommendations and their theoretical basis? What are the potential pitfalls and how would you avoid them. Be sure to discuss ethical, managerial, political, leadership and financial issues. Cite to course related materials to back up your positions. Use the following figures and important information in your solution along with any applicable theory from your course materials: Small City Projected Budget FY (current year) Revenues Property Tax* 1,100,000 * Includes personal property – cars and boats but excludes business inventory. Payroll Tax 100,000 Federal Aid & Grants 50,000 State Aid & Grants 200,000 Fines 50,000 TOTAL: $1,400,000 Expenditures Salaries and Wages 900,000 Benefits 250,000 Contractual expenses/other current 200,000 Equipment and capital 100,000 Interest Payment on $1 million debt 100,000 Council Member Medical Benefits 50,000 TOTAL $1,600,000 Additional Information: Property Tax Rate = $1.00/$100 assessed value Assessed property value= 75% market valueEmployees by Department: Public Works: 4 Police: 5 Government Administration: 4 Parks and Recreation: 4 Part Time: 6 ***Peer reviewed sources only****

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