Example Of Economics: Policy Memo Case Study

The city government is the local governance charged with the expedition of National Government’s development’s agenda. However, its development decisions must be supported by sound economic decisions often entailing positive budgetary framework, cost-benefit analysis and projective financial prospects. Based on the views of the local chamber of commerce, most of its reasons are well-justified on economic realms. Besides, the construction of the stadium would complement the public demands that compel the local governance to provide basic facilities to its citizens.
Funding this project would a sure economic intervention. It is imperative to note that a stadium is both economically and socially sound to the public, and being a public good in which the government offers some it’s sporting and recreation facilities, it will indeed fulfill the government’s responsibility of offering such incentives to the public. In this regards, the local chamber of commerce’s assertion that the stadium will meet the social and sporting demands of the local sports team. In addition, these teams will be empowered because the stadium’s parlance that shall have essentially all facilities for training. Principally, sporting is a key sector o social life that most people depend on, and as such in most cases advertisements take such platforms. Therefore, an efficient team will indirectly generate revenues to the government as most cooperates will advertise their products through the sporting avenue. This concept is economically sensual and holds justified view to this course of project. Thus, the facility shall complement the public needs for a recreational facility, as well as providing an economically viable platform for corporate advertisements.
Moreover, the chamber’s assertion that the local city council has some surplus revenues in its Rainy Day account is a proper justification to construct this project. Since developmental projects exist within the mandate of the city council, its budgetary estimates must capture key developmental projects that shall have positive significance to the lives of the people. In addition, the council’s activities are funded from its collections as well as borrowings, and of which must be well-justified under the terms of budgetary programs. The construction of the stadium being a capital project would require huge financial predisposition and as such the council must lay out proper strategies to find the project in the subsequent years. Thus, having surplus means that the money could be allocated on capital projects like building a stadium whose benefits outweigh costs in the long run. In addition, borrowing to finance any shortfalls for this project will be adequately complemented by the proceeds from the stadium as it will be used for hire by the either the private or public members. Borrowing is yet another way that the council could use to finance most of its projects.
The potential for this project is a major reason for its design and commencement. As the chamber of commerce states, the stadium would act as a long term investment portfolio to the city council. Therefore, the expected revenues after the completion of this project will increase the revenue collection of the city council, and thus boots their revenue reserves to execute other projects. Under the cost benefit analysis, a project would proceed when it’s economically viable, and its projected benefits outweigh the costs in the long run. Thus, the stadium might attract higher costs during its construction, but would lead to profitable intervention once its operations begin. Thus, the benefits associated with this project outweigh the cost implications that it would attract; first, it’s a public facility, its economic viability, and sound financial prospects of the city council to finance this project.
Despite ratifying the decisions by the chamber of commerce to have the construction of the stadium, there are certain reservations that I shall hold to this project. In the first case, the project should be divided into phases of financial years. For instance, the allocation for this project every year must take cognizance of the financial viability of the city council, and whether its perennial collections would be enough to suffice the construction demands for the project. Thus, the project could be distribution in three financial years, whose allocations are predetermined based on the council’s yearly collection. Besides, the economic viability of this project should be tabulated, and if it’s prospective, then the design could be advanced even to attract more investors.