Culminating Project Part III - only have to do question #4 because it is team project

White Group Memo Two Summary

White Group

Bethany Grissum

Darrell Johnson

Megan Schlager-Reyes

Nika Spann

Ryan Benavides

Valerie Brower

Grand Canyon University: ADM-626-0500

September 13, 2017

White Group Memo Two Summary

The Budget and Finance Teams are charged with identifying areas within the Water and Sewage Department and Economic Security Department to reduce inefficiencies and implement financial changes due to the financial crisis in Hadleyville. The Water and Sewage Department is somewhat unique because of being an enterprise fund and supported entirely by user fees. This assessment will provide some analysis and projections of the user fees for water distribution, water reclamation, and treatment. Justification will be made for an increase in user fees bringing operating costs in line with revenues while maintaining the expected service levels. Additionally, the use of available federal resources will be sought which will demonstrate the ability to generate economic development, provide job opportunities, and rebuild the community.

Impacts of the Financial Crisis

When Wilson Performance Automobile Plant closed, the town experienced a tremendous loss. The monetary catastrophe of $21,283,310 has impacted town industries, facilities, institutes, services, administration and the citizens of the town. Based on this observation, cutting out locally funded programs and applying for government grants will help establish programs such as food assistance, medical, child care, and employment would uplift the town of Hadleyvile.

According to Greenstone, “The traditional approach to evaluate policies designed at attracting new plants is to calculate the number of jobs gained and the cost of the tax breaks awarded to firms” (Greenstone & Moretti, 2003, p.3). This is a capable approach that confirms a productive financial plan for the impending years for the Town of Hadleyville in order to correct the economic predicament that exists and to perform a proper data base evaluation, budget examination, scheduling, procedure study platform assessment and inspection . It is critical to have a plan that has specified reviews of the profits and costs to keep and preserve the shortfall (Smith & Lynch, 2011). Providing attention in these areas should produce positive financial results within the next three - five years reflecting consistent revenue to bring the town out the financial crisis.

The greatest opportunity for rebound is to entice innovative companies or major businesses. The general earnings diminished from 59,440,850 to $36,488,470 this year single-handedly (Budget Briefing Books, 2011, p.7). A few recommendations that might generate profits for Hadleyville include company transfer levy acknowledgement for new establishments that relocate to the town, to establish an instructing contribution for existing industries to enhance their employee’s services and instruction, and financial improvement to rates that could reduce the price to handle responsibility.

The water and sewer capital improvement projects require a large financial commitment, but will generate revenue once completed. Hadleyville can anticipate over $9 million dollars in revenue once the new water treatment plant and reservoir is completed. Keeping costs under control is an important part of the capital improvement program so the town does not acquire unnecessary expenses. If project completion is delayed, this will also delay when the town can start collecting revenue. It will not be popular, but user fees will need to be increased at least until the treatment plant and reservoir is completed, at which time the budget can be reevaluated and user fees can potentially be reduced.

Minimizing the Impact of the Financial Crisis

It was found that both utility departments have an overtime budget. Instead of paying employees overtime, we will encourage them to earn compensatory time or flex time which will reduce the Water and Sewer Department overtime costs of $50,000 and the Economic Security Department overtime cost of $20,000. It is also recommended that a flexible work schedule be reviewed for implementation to increase efficiency and productivity during operating hours, thus reducing unnecessary overtime. A reduction in travel and training should be strictly imposed limiting all employees to regulatory or necessary certification travel and training only. Both utilities combined have a budget of $450,000 for professional and outside services at this time. These services should be closely scrutinized to ensure they are reasonable and necessary while also identifying if they can be performed by in-house staff.

Conclusion

H adleyville, a town that was once prospering from a surface view, now struggles with adversity . The current financial challenges will soon cease to exist. After combing through areas of opportunity our town as we know it will rise. Minimizing the impact of the financial crisis and highlighting the town services will be the center for economic growth. The priority is that the department budget is not elimin ated to perform these vital duties to the community. The budget that once accounted for employee benefits, jobs, and revenue is no longer a source. Hadleyville will become a stronger town which will attract businesses and increase the population.. The new Hadleyville starts tomorrow.

References

Greenstone, M. & Moretti, E. (2003). Bidding for Industrial Plants: Does Winning a ‘Million Dollar Plant’ Increase Welfare? The National Bureau of Economic Research. Retrieved from http://www.nber.org/papers/w9844.pdf

Smith, R. W. & Lynch, T. D. (2004). Public budgeting in America (5th ed.). Upper Saddle River, NJ: Prentice Hall. perspectives

Town of Hadleyville Finance Department. (n.d.). Budgeting and Briefing Books. Retrieved from file:///C:/Users/Megan/Downloads/BudgetBriefingBooks_student.pdf