The City of Smithville is facing a budget shortfall of 1.7 million (best case scenario) to roughly 5.1 million (worst case scenario). The proposed budget by City Manager Harmsworth calls for a merit raise freeze, a reduction in the workforce, and mandatory furloughs, which would net a savings of nearly 2 million dollars in revenues. This net savings would be adequate to off-set the best case scenario budget shortfall for the City of Smithville.
There are several issues the city of Smithville was facing during this budget crisis. The city was facing a large budget shortfall, power struggle between the city Manager and councilmembers, and conflicts between labor unions and the city. Essentially, the three groups have differences of opinions, agendas, and interests and it comes down to powerplay; the one with the most power will be able to advance their issue. From the City Manager’s position, autocracy is apparent as he makes an attempt to advance his interests (proposed budget) while minimizing the interests of other groups ...
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...ease the power they exert within an organization (Morgan, 2006). The budget crisis could potentially have been avoided had city leaders made an appeal to the public, explained the situation and offered a reasonable solution to the problem. Moreover, the transparency would have relieved some tension between the City Manager, city council, and the three labor unions. Because the city was not transparent and forthcoming with union leaders, the city negotiators enter the negotiation process giving members false hope of receiving salary and benefit increases when there were none to give. In summary, given the current situation, the City Manager needed to exert his expert power on the budget issue, join alliance with the union leaders, and push the city council to change city charter to implement the sales tax, which would have potentially off-set the budget shortfall.
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