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•CITY OF SOUTH BEND I OFFICE OF THE CLERK
<br /> Mr. Parker replied, It's interesting! Just Google "Carmel debt", it was a pretty big issue in this
<br /> year's mayor's race. The Mayor of Cannel was up for re-election and it was a pretty big issue, the
<br /> level of debt that they had taken on.
<br /> Jason Banicki-Critchlow, 3822 West Ford Street,interjected,Well when you look at,their average
<br /> household income is more than three (3) times ours. So, they're also able to, you know, just on
<br /> income tax revenue, expect to be able to re-pay that.
<br /> Mr. Dunn interjected, I was thinking the same thing. Most households just write a check for their
<br /> share.
<br /> Mr. Banicki-Critchlow continued, The average annual income for Cannel is $150,000 a year, let
<br /> alone the price of their houses.
<br /> Committeemember Voorde asked, Did the incumbent win?
<br /> Mr. Parker replied, He did. He won the primary.
<br /> Committee Chair White asked, So, in terms of this whole discussion about debt and when citizens
<br /> say we are in debt and we can't pay our bills, blah, blah, blah, blah, blah, how would you respond
<br /> to that? These are real figures. So, what is the response? The debate is ongoing. But, looking at
<br /> this and looking at other information that you've shared,we are kind of right in the middle. So, for
<br /> a City our size and with the amount of debt we have,how would you describe that?
<br /> Mr. Parker replied,Again, I would describe it as right where I want us to be. We are definitely not
<br /> in a position where we cannot pay our debt at any point in the future. To the point about if you are
<br /> in Cannel and there are high property values, that's correct, but just like on the cash reserve side
<br /> we're preparing for future fiscal challenges, we're doing the same thing on the debt side. We don't
<br /> want to be in a situation where yeah, we can afford it this year, but if property values tank, we're
<br /> going to be in a lot of trouble. We're not in that situation. We are in a situation where we are going
<br /> to be able to be sustainable with this level of debt and where we're going to be able to manage this
<br /> level of debt in perpetuity. And we'll be able to see that even more clearly when we get to the
<br /> actual amount that we pay out in debt service each year, as a percentage of our total expenditures.
<br /> Committee Chair White replied, Thank you.
<br /> Mr. Parker continued, This (referencing a slide in the presentation) kind of shows an historical
<br /> debt-per-capita for the City of South Bend. The only message here is that while if you were to put
<br /> a trendline on this, it might show a slight increase, but it is essentially flat. The y-axis scaling here
<br /> is probably a little bit misleading, but it is essentially flat, in terms of over the last ten (10) years
<br /> our debt-per-capita. So, coming back to the question from Councilmember Voorde about the debt
<br /> limit, this is defined by Indiana Law and this is the legal limit of debt that can be issued by a
<br /> governmental entity. And what it is defined at, is two percent (2%) of one-third (1/3) of the net
<br /> assessed value of all property. So, you take the assessed value of all property in the City, divide it
<br /> by three (3), take two percent(2%) of that, and that's your debt limit.
<br /> He went on, However, and this is a very important caveat, only certain types of debt are included
<br /> in that debt limit. So, not all the debt that the City has outstanding is included in that list.
<br /> EXCELLENCE ; ACCOUNTABILITY INNOVATION I INCLUSION EMPOWERMENT
<br /> 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 (574.235.9173 110574.235.5567 www.southbendin.gov
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