To fulfill a campaign promise, the new mayor of Cordelia is looking for ways to finance an increase in the level of police protection without raising the city’s property tax rate. He reads the city’s financial report and notices that the Capital Projects Fund has a large fund balance. He discusses the fund balance with his finance commissioner, who says: “The fund balance is high because the city voted to sell bonds last year to finance construction of a new firehouse. The architect just finished the design of the firehouse, and we are about to award a constructon contract.” The mayor responds: “Forget the firehouse. I promised to put more police patrols on the street. Let’s use the bond proceeds to hire more police officers.” How should the finance commissioner respond to the mayor?

  • CreatedDecember 30, 2014
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