Where must a deficit in a municipal utility be raised?

Get more with Examzify Plus

Remove ads, unlock favorites, save progress, and access premium tools across devices.

FavoritesSave progressAd-free
From $9.99Learn more

Prepare thoroughly for the Municipal Budget Test. Utilize flashcards, multiple-choice questions, and detailed explanations for each query. Enhance your budget management skills now!

A deficit in a municipal utility must be raised from the current fund. This is because the current fund is responsible for covering the operational deficits of municipal services, including utilities. When a utility incurs a deficit, it represents a shortfall in the revenue that should be generated from the services it provides. To ensure the continuity of these services and maintain financial stability, the municipality needs to address this deficit promptly, which is typically done through the current fund.

Utilizing surplus funds might help in some situations, but it does not necessarily provide a sustainable solution to future deficits. Raising a deficit through next year's budget could lead to budgetary strain and does not provide immediate relief. The special emergency fund is intended for unforeseen emergencies and would not be appropriate for standard operational deficits of municipal utilities. Therefore, the current fund is the correct mechanism for addressing and raising the necessary funds to cover the deficit effectively.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy