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Write a proposal to present to the Hadleyville Town Council in response to the town’s financial crisis as indicated below.
The town of Hadleyville, Arizona is reeling from a recent shutdown of the Wilson Performance Automobiles Plant that employed more than 2,500 of the town’s population of 40,000. In addition, the recent economic strife has lead to decreases in retail sales tax, more job losses, and public utilities that are insolvent and unable to keep up with demand despite fee hikes in 2 of the past 3 years. The town budget has been slashed twice now with overall reductions approaching 12% in the previous fiscal year. With revenues continuing to decrease and no end to the economic woes in sight, the town budgeting process begins this fall.
You will be provided with three briefings from the Town Manager via memo. The briefings will provide you with additional information needed to complete your proposal.
Review Memo One
September 14, 2010
Budget and Finance Teams
Jack Sprague, Town Manager
Town Financial Crisis
As you all are aware, Hadleyville is in a deep financial crisis. As your Budget Briefing Books will show, the town has experienced declining revenues ever since the Wilson Performance Automobile Plant shut down 3 years ago. Beyond that, the national financial crisis has hit the town hard, and has seen even more of the fragile industry disappear. Our residents have increasingly had a hard time finding work, and those who have not outright left are anchored to mortgages they cannot afford and family obligations they cannot meet.
I have divided the department into teams, and over the course of the next 8 weeks, each team is required to develop a proposal outlining a 3- to 5-year plan for recovery. This will not be easy, and I suspect as you delve into individual department budgets, you will encounter troubling decisions that must be made. Ultimately, the political leadership of the town will have to make those decisions, but we cannot do so without your help.
Each team will have access to information on revenues and current expenditures via the Budget Briefing Books and will need to determine which two of the town’s most troubling departments need immediate revisions in their operating budgets. We ask that you apply the knowledge you’ve gained about operating budgets and your own personal experiences to analyze the best way to balance the need for critical town services with the town’s budgeting needs.
Some key points: Be sure to analyze the town’s direct and entitlement obligations in the adopted budget; examine at least two town departments and make recommendations for reduced spending; present an overall proposal to the town council of your findings and recommendations for reducing the town budget by at least 13% overall immediately; and look for ways to eliminate deficit spending in 3 years. You will have a lot of options at your disposal. Be sure to weigh the positives and negatives of each.
Your first assignment will be to individually summarize the information provided to you from the Hadleyville Town Manager in Memo One.
Anticipate challenges and opportunities you foresee with this project.
RUBRIC
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