The city council of the City of Highland Hills has adopted a policy of aggressively pursuing grants and other resource inflows from other levels of government.Over the past several years, the proportion of total City revenues that comes from other levels of government has been steadily increasing.As a consequence of these increased revenues, the City has begun offering a number of new services to the citizens of the City.In assessing the financial condition of the City of Highland Hills, an analyst would conclude which of the following?

Question

Quizplus · Accepted Answer

While the increased revenue from grants and other resource inflows can provide additional funding for new services, an overreliance on intergovernmental revenues can be a negative fiscal characteristic because it can make the City vulnerable to fluctuations in funding from other levels of government. Therefore, an analyst would conclude that the increasing reliance on intergovernmental revenues is a potential risk to the financial condition of the City.

The City Council of the City of Highland Hills Has