11-27-18 Personnel and Finance (TIF)

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CITY OF SOUTH BEND OFFICE OF THE CLERK are seeing now is a little bit of a shortfall just given the timing of when the improvements come online, when they get reassessed, and then when you actually get the money the following year. As you see the projects moving forward roughly on time and once that new value comes, I think you can look at area improvements around there and how much value that generates. We can look at the exact numbers but I think once everything is built, the Assessor would have to go really far out. And that is what all scrutiny came to. We felt comfortable about those projections because there is a lot of investment happening here and you really have to undervalue it to be in a problem situation. So that is on the Eddy Street Bonds. He continued, On the professional services piece,we just went to the Redevelopment Commission to fund another engineer. They will be an on-staff engineer. They aren't a full-time engineer as this is a trial but we are trying to fill that gap because there are so many projects that need engineering.We've done a good job of overloading our Engineering Department with TIF projects. So we did go and try this trial with another person that we are managing. But looking at the big professional service costs, we need a good accountant and we do a lot of that in-house but we do have to go outside, particularly for bond counsel. We need a good lawyer and we do a lot of that in-house. Most of the day-to-day work is done in-house but there are specialty cases that no City attorney could necessarily have. It wouldn't make sense for us to have specialty people on staff just waiting idle. They are expensive but we do have to go out there. Engineering, I don't think, is looking to move into an in-source model. I think we've thought about it and thought that we could do some of the design in-house. We've thought about whether or not we could save money if we hired more internal engineers to do some of the smaller stuff but I don't think that is the strategy in the Engineering Department. That is something we have considered. And then if you look at planning resources, I think our planning team has tried to keep down the cost of planning. We do need outside consultants at times but we try to minimize the cost by doing a lot of work in-house. We do negotiate those down by filtering through the things we can do. We do try to keep those costs down but, yes, professional services are huge. If you think of a streetscape project, we are talking about ten percent(10%) or so. We are trying a pilot this year on the inspection side. So on the front end you have design and engineering and that is around ten percent (10%) of the project cost. On the backend you have inspection to make sure it has all been done right. Parks has actually hired and in-sourced an inspector because they have so many projects to see if that would bring down cost. So we do look at in-sourcing and how to save money but a lot of this is highly-skilled output that is going to cost whether we pay them in-house or externally. Engineers, architects and the rest are highly educated and therefore highly compensated. Ms. Kesim stated, I had a couple questions. One (1) is that there was $92,000 for an emergency demolition from DCI through CDBG funding. I was wondering what was demolished and what was the emergency? It was sixty-four(64) eighteen(18), account number 600-1201-415.31-06. Dr. Mueller replied, I will have to get back to you on that. Offhand I can't think of why CDBG would have been used for demolition. Ms. Kesim stated, One (1) of my other questions is about the Eddy Street Capital Funds, #759. The land is showing$17 million in building,$5,974 in#385 and that reduces it down to$16 million for bond proceeds in 2018. What I'm wondering is if this is going to cause another deficit because of the debt service cost coming up for Eddy Street. I'm wondering if we are going to fall short. EXCELLENCE ACCOUNTABILITY I INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574 235 9173 TTD574.235.5567 www.southbendin.gov 19