03-04-19 Personnel and Finance (Tax Caps/Impact)

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CITY OF SOUTH BEND OFFICE OF THE CLERK turn it over to our City Controller, Mr. Daniel Parker. There is a PowerPoint presentation (which is available in the City Clerk's Office) and you will be able to get copies online tomorrow. The Administration and Council Members will have an opportunity for questions and comments. I would like to thank our citizens for being present. This is really a result of the 2019 budget hearings,where our citizens had made a number of recommendations in terms of preparing for the upcoming budget process. But also they were sharing their concerns regarding the 2019 budget hearings. I want it to be made clear that we are listening and there are a number of other strategies that we will be putting in place for our citizens. Most importantly, we'll assure that the budget process is as transparent as possible and that each time that we have a budget hearing, we make it better. At this time, I am going to turn it over to our City Controller, Mr. Daniel Parker. 2020 Property Tax Caps, Impact and Preparation- Daniel Parker, City Controller Daniel Parker, City Controller with offices located on the 12th floor of the County-City Building, stated, I want to say, thank you for being here, being present, and taking part in this entire conversation. For this entire series, I think it is helpful not for Council Members and citizens, just but also for us as the Administration to always have an eye on what the citizens want to understand better. We are always thinking about the budget and planning for next year's budget and future years' budgets and I think it's important that we communicate that as broadly as possible. I did want to point out that the title slide here is now called the"Fiscal Curb"because we do think that while there is going to be an issue, it is something we will need to keep our eyes and fingers on to be prepared for. It is not going to be a situation in which we fall off the cliff and end up in a big fiery car wreck. We are preparing for the 2020 Fiscal Curb and that is sort of the focus of the presentation today. In terms of what we will cover today, we'll be going over what the issue is, what is causing that issue, and ultimately, where I want to spend the most time, what we are doing as the City to address this issue to make sure we are prepared for any kind of revenue shortfalls that we may have going forward. I do want to say, please feel free to jump in at any time with questions or comments that you may have. He continued, This is a slide (referencing the General Fund Plus) that the Mayor used in his presentation that was addressed before Council several weeks ago. This is the scenario that the City is facing in our General Fund plus our Income Tax Funds. You'll see the 2019 Budget is balancing these funds as required and every year we work towards that balanced budget. But going forward in 2020,2021,and 2022,we do have significant deficits where expenditures are out pacing revenues in 2022 close to $10 million. By and large,the reason behind this is going to be the focus of the first (Pt) part of this presentation. Why are we in this position, where our expenditures are projected to outpace our revenues?Then we will be changing to how can we change our operations to address this as we go forward. The first (1st) part is what's causing the issue. I'd like to break it down into three (3) buckets to what is causing the problem for 2020 and beyond. The first (1st) bucket and the most significant, is revenue. At its core, the Fiscal Curb is a revenue issue. There are a number of things that contribute to that revenue issue, several of which we will go through today. The biggest of which(referring to the hand-out) is the Circuit-Breaker Property Tax Caps, the expiration of the exemption that St. Joseph County received on those tax caps. This is not the only revenue issue that we have going on in the City currently. There are some additional conversations that I want to talk about today regarding Medicaid Revenue, specifically the Medicaid Supplemental payment adjustment for EMS. Then, some gasoline tax distribution questions that were actually raised in response to the Mayor's Annual Address to the Council several weeks ago. That's the first(1St)bucket we are going to go through. The second(2"d)bucket EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 1227 W.Jefferson Bvld South Bend,Indiana 46601 I p 574.235.9221,f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 2