Where must a deficit in a municipal utility be raised?

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Improve your knowledge of the Municipal Budget Process. Familiarize yourself with key concepts and terminology through multiple choice questions and detailed explanations. Prepare effectively for your exam!

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.

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