scragn
Member
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Joined: May 16, 07
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Here I have to analyze the funding choices available for the local government in the area where I work. I am studying the contrast between the upscale suburb where the job is located, and the distressed city next door. Most of the customers are from the poorer city and depend on the company for jobs, and depend on transportation, govt labor laws, and company claimed diversity to support development in the region. The cities are developing the border area hoping to stem population loss and drive regionalism for shared benefit. Could this paper be analyzed for substance ?
Developing Funding Choices
Determine which revenues are used in which funds: governmental, proprietary and fiduciary
The capital project fund for the city accounts for financial resources used to acquire or construct major capital facilities. Recently the city has financed improvements to the local schools and built a new municipal library. Other fund types include general funds and proprietary funds. General funds account for unrestricted resources not applicable to other funds, while proprietary funds refer to income-determination funds resulting from business activities of a government (capital enterprise) and its internal services (cost reimbursable). Proprietary funds do not take into account the purchase, use of and bills resulting from, expendable finances. Basically it f=refers to a city's 'spending money'. Unrestricted revenues and resources, investments, and received taxes are recorded like cash. Proprietary funds consist of enterprise and internal service funds. Like private business, depreciation and financial performance are measured in a full accrual base. Internal service funds provide services between departments and bill government for their continued use Itemized budgets at the department level include a major proprietary fund, unique to the city and based on its location. Next to Lake St. Clair, the city pumps its own water, maintains upkeep of sewer facilities, but has the waste treated from the Water and Sewerage Department of Detroit. Recently hikes of up to 9.25% were imposed on suburbs, and the city capped its rates from $50 to $60 per cubic foot per household. 'The city accounts for water and sewer operations, municipal parking and the city marina. These major funds provide a large sum for city operations within these departments and provide detailed information from which to derive revenue expenses.' (City of GP 2005)
The City maintains six individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General and Local Streets funds, each of which are considered to be major funds. Data from the other four governmental funds are combined into a single, aggregated presentation.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $5,425,180, an increase of $104,598 in comparison with the prior year. Approximately 36%of this total amount $1,973,511 constitutes unreserved, undesignated fund balance, which is available for spending at the government's discretion. Another 36%, $1,941,586 is unreserved, designated. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has
already been committed to other purposes
The City maintains one type of proprietary fund: Enterprise funds are used to
provide the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sanitary sewer operations, its municipal parking system, and marina. Over the past several years, the net assets of the Water and Sewer Fund were allowed to build up in order to address the continuing maintenance costs of an aging system.
The Fiduciary funds are used to account for resources held for the benefit of
parties outside the government. Fiduciary funds are not reflected in the government-wide
financial statements because the resources of those funds are not available to support the City's own programs.
Describe any restrictions that could be placed on those revenues
Even in school districts where the state of Michigan subsidizes the entire cost of education, Plank says parents still get upset about how "these kids" are bringing down test scores and adding disciplinary problems. "Grosse Pointe and Detroit are a great example of the tension and worry between class and race," Plank (2006)
Use of the full accrual basis of accounting records these expenses as paid not when they take place, decreasing the value of capital assets of the government- yet not accounted for as cash expenses, their value as an asset or liability is realized in the long-term. Earned from investment, grants and procurement, it is possible, but not conclusive, that Staples sells office supplies to departments in GP. It may be recorded through measurement focus as a separate account, realized as revenue in one department, or revealed as an expense in another. Purchasing department and general funds would work in tandem in this kind of arrangement to manage the amount spent for procurement and adjust budgets for additional expenses, such as purchase of extended warranties and service plans.
Several funds account for resources and activities of government in fund accounting. The restrictions placed from Congress, grantors and private groups often 'restrict' these funds for specialized uses. In addition, the general fund holds money in reserve to pay for utility expenses, or earmarks it with the donor's wishes (school donation). Modified accrual accounting balances books in a short-term budgeting window. Major municipal functions part of the general fund (streets, public safety, and administration) is static. 'The nature of organizations divides funds into categories of resource restriction not functional operations.' (Granow 2004) Unlike businesses, capital assets are recorded as expense when they occur, not as cash income.
Evaluate how public policy decisions affect the receipt of revenues
Last year some 3,000 residents signed a petition to have Grosse Pointe Public Schools re-register each of its roughly 9,000 students. The district spent about $8,500 to train and bring in enough people to complete the process over the summer. In the end, only 30 to 40 students were deemed out of district and removed. Dry run, and first run stages of implementation use feedback to make changes on the fly when high cost programs are reactive to public reaction, employee activity, long term worth of the policy, overruns in cost, time, manpower and material, and the use of consultants, and thrid party vendors with substantial interest and involvement in policy objectives. Some people said there were racial or ethnic undertones, but the majority (of constituents) said, 'We're paying taxes and we want to make sure we're educating who we should be,'" Fenton (2006) Among the mix of funds, long term obligations are reported as liabilities. The debt issues as other sources, discounts as other income, while the debt service expenditures express issuance costs. The tentative plans that are subject to change (non spent money) and restricted funds are part of fund equity that legally has to be reported. Thus, short term investment, operating expense and appropriation historically is kept low in order to break even. This is because of the inherent nature of the city to 'profit' from the services it provides and the investment of its citizens back into the community. Everyone benefits from utility service, bus lines and revenue bonds that can restrict payments and interests from that fund! This ensures that the governments will not shutdown even if the department has to cutback. In 1996 the federal government did just that, because of a lapse in fund of Continuing Resolutions and filibustering over the budget. Michigan Governor Granholm plans to shut down selected departments in May following the failure of the Legislature to enact an across the board 2% services tax to alleviate a $386 million deficit.
Analyze economic conditions affecting revenue projections
. Macro budgeting refers to overall policies and objectives related to larger variables such as growth, employment, demographics, market forces, etc... Micro deals with individual spending policies of the local, state or federal government. Reform programs, citizen initiatives and allocation programs give budgets a link to fiscal management programs within a short window (30, 60, or 90) of days. Clear and transparent allocation strategies, integrated approaches based on realities, governed by precise rules and expenditure control help keep the number one failure of coordination of policies and planning, adapted from the World Bank (1998). Divergence from planned performance measures are important because annual cash flow statements and budgetary budget flows are necessary to keep the business focused on annual expenses and changes to the same. Consistent scans of the external and internal business environment identify in concrete terms the expected quanifications of numbers. Realistic interpretations of the best use of income generated through taxes, fees, surcharges and capital funds ties it into most effective and accessible to public use of the money that will benefit all the most. Incentives that are currently given to developers and other agencies to enhance economic development affect future budget spending priorities.
. Government establishes a minimum amount of funds to comply with statutes and efficiently operate. Capital project funds are restricted, arising from bond proceeds. Citizens pass bond initiatives that finance road improvements or build new facilities. Capital asset cost of construction, labor, materials saved for future use are legally obligated to be invested because they are mandated to be spent. Unused expenses from other areas can also divert to this fund, a politically expedient choice reinforcing commitment to planned activities. Informal communication and unique talents lend themselves to self directed teams. The control of activity and managment of growth is made with quick decisions by middle managers. Using centralization these managers make rules of best benefit to the dept and company. Departments, work teams and sharing of resources in a formal hierarchical structure succeeds with the interaction, coordination and how they work together sharing resources, budgets and similar tasks to achieve the same ends.
Economic considerations in face of the new budget
• Current property development and projected assessed valuation.
• The reduction of State Shared Revenue.
• Inflation and the rising cost of employee benefits.
• Public Safety Contract negotiations.
• Rising water supply and sewage processing cost.
• Expanded Recreation Program Services and the associated expenses.
• Planning for additional Forestry expenditures as it relates to the Ash Borer infestation.
• Capital expenditures for aging infrastructure (Streets, Water Mains and Sewers) along with
capital expenditures for equipment replacement
Develop a revenue policy that aligns with community values
The city should conduct a "Yellow
Pages" review of the services it provides
— that is, it should ask, "If you can find
it in the Yellow Pages, should city
government really be doing it?" (LaFaive 2006)
Many customers at the store encompass small business, home office, and professionals who typically are more affluent in GP, and provide a majority of the return for the company, from personal estimation. This disparity results in the need for city residents to have available facilities near home or work, and that of suburbs wishing to enhance tax base, retain small town feel, and enjoy the benefits of a diverse customer base. Enterprise zones could be used to enhance the economic development implications of this policy. The operating budget document is the sum of the expenses incurred by an agency over a period of time. Strategic plans and major projects often have the same type of written reference or statement of record. Just like meticulous accountants, being exact with budgets is now a necessity in many states with balanced budget amendments. Depending on the type of agency, they often contain historical data about the service or operation, and include summary information on their main concern. Capital budgets for major projects,expense budgets for recurring services, and performance budgets, such as for programs that focus on initiatives or use modern methods As a result of the dynamics of how Detroit's government changes, Grosse Pointe's will as well- being that the auto industry remains a large contributor to the local economy. Customers, clients and caveats are all the same, they advocate a return on investment. Public administrators and urban planners share the notion that government should support reinvestment in communities.
Appendix
Bibliography
LaFaive, M. (Winter 2006) Advice for the Mayor of Detroit
Michigan Privatization Report • Mackinac Center for Public Policy http://www.mackinac.org/article.aspx?ID=7515
City of Grosse Pointe MI (2005) Financial Statements and Supplementary Information. Audit by Rehmann Robson CPA, as reported to the Michigan Department of Treasury Auditing Procedures Report. Retrieved from http://www.822100Grosse Pointe City 20060130_149306_7.pdf.
The City of Grosse Pointe Comprehensive Master Plan. (2006) Retrieved from http://www.grossepointemi.us/f/master_plan.pdf
Plank (January 2007). American School Board Journal. http://www.asbj.com/2007/01/0107coverstory.html
Meindl, J. (2004) The romance of teams: is the honeymoon over? Journal of Occupational and Organizational Psychology. 77, 463-467.
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