Suppose that city officials estimate that the center would generate an additional $150,000 in general sales taxes and $200,000 in hotel occupancy taxes that are dedicated to promotion of tourism. However, the center would cost the city an additional $250,000 to provide police, fire, and other services in connection with center events. Further, the city utility department (accounted for in an enterprise fund) would have to extend utility lines to the center at an initial cost of $1.7 million and would have to incur annual costs of $50,000 to maintain and repair these lines. None of these operating and utility costs would be charged to the convention center. Taking into account these costs and revenues, should the city construct the convention center?
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