Payneway is a hypothetical medium sized municipal government in southwestern Michigan with a population of 31,000. Due

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Payneway is a hypothetical medium sized municipal government in southwestern Michigan with a population of 31,000. Due to years of financial improprieties, poor financial management, and severe scandals, the municipality has no idea how much revenue it brings in annually or how much expenditures it spends on a yearly basis.

You have just been hired as the city manager of Payneway. One of your first tasks is to develop a list of the major revenue sources in Payneway. Your final list includes the top 10 revenue sources for the municipality:

Source Annual Revenue for 2015-2016

Revenue Sharing from the State (unrestricted) $4,500,000

Federal Aid (restricted to public safety operations) $3,000,000

City Income Tax $1,100,000

Garbage Collection Fees $800,000

Water Distribution Fees $550,000

Sewage Fees $450,000

Police Tickets $200,000

Parking Meter fines $80,000

Parks Admission Fees $45,000

Building Inspection Fees $10,000

After examining expenditures, you determine that the city had a total amount of expenditures of $10,999,990 for 2015-2016. Those expenditures were devoted to the following Departments/Sources:

Department/Source % of Expenditures for 2015-2016

Police Department 30%

Fire Department 18%

Police/Fire Retirement Program 12%

Debt Payments for Water/Sewer System 15%

Debt Payments for New City Hall (built in 2000) 15%

Salary Costs for all other Employees 8%

Supplies & Expenses for all other Programs 2%

Based on ideas discussed in the course materials, identify an effective budgeting system that could ethically and effectively control revenues and expenditures so that future financial management improprieties do not occur. Additionally, based on data presented, what other budget challenges do you still have to solve as city manager? Develop a plan to solve those challenges.