In 2016, city officials in Salem, Oregon, requested funding from their voters to replace their 26,000-square-foot police

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In 2016, city officials in Salem, Oregon, requested funding from their voters to replace their 26,000-square-foot police headquarters with a 148,000-square-foot, state-ofthe-art building—the largest building in city history. Based upon professional estimates, the building cost of the new headquarters was $45 million. The estimate included a caveat acknowledging a heavily demanded construction market’s impact on the numbers, noting that if construction didn’t start in May 2016, “estimates must be indexed at a rate of 5 to 7 percent per year.” Voters said no, and the city came back a year later with a $39 million proposal for a 115,000-square-foot station that voters approved. When the bond did pass, however, the estimate shared with voters was already outdated due to skyrocketing construction costs and design changes. In July 2019, city officials signed a contract with a builder limiting construction costs of the police headquarters to $58 million. Early efforts at covering the nearly $20 million deficit included diverting urban renewal funds planned for other downtown projects, reducing police operations and public works department budgets, and targeting contingency funds. 


Required

a. As a citizen of Salem, what questions might you have about the police headquarters construction? Prepare a memo addressed to city officials that summarizes your questions.

b. As a city official, what efforts might you make to address voter concerns and address the construction budget shortages? Explain. 

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Accounting For Governmental And Nonprofit Entities

ISBN: 9781260118858

19th Edition

Authors: Jacqueline Reck, Suzanne Lowensohn, Daniel Neely

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