The board of trustees of an independent school district is contemplating several policy changes and other measures, all of which it intends to implement within the fiscal year that ends August 31, 2018. It requests your advice on how the changes would affect the reported general fund revenues. For each of the proposals, indicate the impact on revenues (or accounts comparable to revenues, such as proceeds from sale of capital assets) and provide a brief explanation. Address the impact on both the fund and the government-wide financial statements.
1. Allow a three-month grace period for the payment of property taxes. District property taxes for the fiscal year ending August 31 are currently payable in 10 installments. The final installment is due on August 31. The proposed change would give taxpayers a three-month grace period before interest and penalties are assessed. The district estimates that the change would affect $2 million in receipts.
2. Sell a parcel of land that the district purchased three years earlier for $450,000. Current market value is $500,000.
3. Request that a donation be advanced from December 2018 to August 2018. An alumnus of a district high school has indicated a willingness to donate to the district laboratory equipment having a fair market value of $400,000, along with real estate having a fair market value of $300,000. The district intends to use the equipment in student labs. It plans to sell the real estate as soon as possible and, in fact, has an acceptable offer from a buyer.
4. Sell parking permits to students in the semester prior to that for which they are applicable. The district now sells parking permits to students at the beginning of the fall semester. The permits cover the period from September 1 through June 30. To reduce the start-of-year administrative burden upon staff, the district proposes to begin sale of the permits the previous spring. It estimates that in spring 2018 it will sell $6,000 worth of permits that would otherwise be sold the following September.