2006 Comprehensive Annual Financial Report

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Garage and $3,222,000 in Section 108 Housing and Urban Development notes for economic development projects. The General Obligation bond that was retired during 2006 was used for improvements in the Studebaker Corridor near downtown. The City's debt increased by a net of $5,2 million dollazs during 2006. Under the Indiana Constitution and State statute, the Cry's eneral obligation bonded debt issuances aze subject to a legal limitation based upon 2°l0 ot~total assessed value of real and personal property.. Since Indiana's assessment statutes call for an assessed valuation of one-third of cost less depreciation, its general obligation debt limitation is one of the most conservative in the United States. The City had no general obligation bonded debt outstanding at December 31, 2006. A detailed listing of this debt can be found in the Notes to the Basic Financial Statements. A calculation of the City's legal debt limitation can be found in the statistical section of this document. Economic Factors and Next Year's Budgets As noted eazlier, roperty taxes are the City's lazgest source of revenue. Under current legislation all Indpiana cities assessed values are based on market values. Under this method some properties are still being re-assessed to reflect the changes in values. This process as we as the overwhelming amount of appeals is still affecting the amount of property taxes,received by the City. Due to these current changes, the percentage increase the City is anticipating m 2007 will be less than in previous years. In addition, the State of Indiana General Assembly has enacted property tax legislation to limit property taxes paid to 2% of gross assessed value for residential properties and 3% of dross assessed value for business pproperties. The impact,of this legislation (known as circuit breaker" legislation) will be significant for the City of South Bend beginning in fiscal year 2010. The City enacted new water and sewer rates during 2006 These rates will continue to be revised to assure that the municipal water and sewer system has sufficient revenue to cover operating, capital and debt service funding requirements. Many major capital pro ects aze slated for construction in 2007, including southside retail development, water an~ sewer infrastructure upgrades and the continuation of maj or road enhancements. The City is also lookingg forward to the private development of the Hall of Fame Gameday Center, a 189-unit hotel/condominium/pazking garage project to be located in the heart of the City's downtown. In addition, the City is providing certain infrastructure support for the exciting Innovation Pazk a mixed-use residential and research development located neaz the campus of the University of Notre Dame. During 2006, the City received $12.8 million dollars from the State of Indiana for the City's shaze of the proceeds from the State's lease of the Indiana Toll Road to a private corporation. Although controversial, all municipalities in Indiana have benefited financially from this transaction. The City has deposited the proceeds into a sepazate capital project fund (Major Moves Cappital Pro ect) and has elected to use only the interest earned for current capital projects. During 206, the Major Moves fund earned $179,049 in interest. Requests for Information This financial report is designed to provide a general overview of the City of South Bend's finances for all those who are interested. Questions concerning any of the information provided in this report or a request for additional financial information should be addressed to: M. Catherine Fanello, City Controller City of South Bend Department of Administration abnd Finance 227 W. Jefferson Boulevard, l4` Floor South Bend, Indiana 46601 31