PPA603: Government Budgeting (MGB524DS)
Instructor: Dr. Regis Chapman
July 13, 2015
According to Lee el at (2008), “Three main factors influence debt capacity: expenditure pressures, resource availability, and the commitment of governmental officials to use resources to meet debt requirements. Assessing resource availability involves analyzing all potential sources of revenue including own-source revenues; transfers from other levels of government; and types of self-financing including user charges, special assessments, impact fees, and a variety of other measures to collect fees or revenues sufficient to support ...view middle of the document...
These capital improvement projects are categorized and presented in a five (5) year format, based upon its defined level of importance determined by the City Council” (P. 36).
Every FY has an abundance of challenges and it takes a considerable amount of time to address those very issues. Most importantly, over the past few years, a wealthy of progress has been made to thwart those burgeoning matters that negatively impacted departmental operations and their allocated funds. The FY2015 budget is an extension of that work, which commenced nearly four (4) years ago when financial projection models revealed an incessant rise in property taxes. These fiscal reports played a major role in our current approach toward forecasting future revenues and expenditures. Proposing a .7574 tax rate for four (4) successive years and reinstating the retirement ratio back to its original match of 2:1 has truly been challenging. These two (2) achievements only came to fruition through the efficient, as well as effective management of human and financial resources that began in FY2012. From FY2012 to FY2014 and again with the FY2015 budget, departmental expenditures were strategically modified by using a process titled “zero-based budgeting”. By using this proven budgeting technique, departments were allocated funding based upon its essential needs and clearly defined benefits rather than historical expenditures. Each subsequent FY following the implementation of zero-based budgeting, the City of DeSoto has realized a growth pattern in its fund balances (FB) (P.36).
“The FY2015 planning budget was created by using a taxable assessed value of $2,880,797,042. This monetary figure represents an Estimated Growth Factor (EGF) that is 3.43% greater than FY2014 planning budget, which was 0%. By using an EGF of 2%, the City of DeSoto will realize an increase of $57,615,941 in taxable assessed values. In comparison to the current FY2014, this monetary difference will produce $5,762 in additional revenue for every cent on the tax rate. In FY2014, one cent on the tax rate was worth $287,736. This particular fund is utilized to address the principal and interest payments on debt acquired by the City. The methodology used to calculate the rate is derived from the taxable value of property and the monetary amount required funding debt service payments. In FY2014, the Interest & Sinking tax rate was set at $.2271. The FY2015 I & S tax rate will remain the same at $.2271 per $100 of property valuation.” http://www.ci.desoto.tx.us/
Evaluate the effect of refunding or reorganizing existing debt obligations:
“Corporations reorganize and restructure for various reasons and in numerous ways. Companies reorganize to increase profits and improve efficiency. The reorganization of a company typically addresses the efficiency component in an attempt to increase profits. It’s not unusual for a corporation...