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.

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 value

Employees by Department:

Public Works 4

Police 5

Government Administration 4

Parks and Recreation 4

Part Time 6