Capital Project Funds
Through his campaign, the new Mayor of KC promised his supporters that he will increase the level of police protection without raising the city’s tax rate starting from his first day in office. Working on his promises, he read the financial report of his KC city and noticed that the capital project fund has a large fund balance. He discussed that with his finance commissioner and the commissioner replied that the large balance is to finance a public library for the city. The commissioner further added that they are about to award the tender to the contractor. The new mayor suggests that we need to forget about this project and allocate the money to hire more police patrols for the city (without raising taxes) as he promised his supporters. How should the commissioner respond to the new Mayor? Do you think his proposal is illegal? Would it make any difference if the city’s plan is to fund a new firehouse instead?