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•CITY OF SOUTH BEND OFFICE OF THE CLERK employee and recognition and employee wellness initiatives that includes continuing investment in the active wellness clinic. Mr. Parker stated,This is the second(2nd)half of the 2020 budget overview where we actually get into the numbers in the 2020 budget. So up on the slide(referencing the presentation) and in your packets is the overview of the entire 2020 budget. As you can see in there, the proposed expenditure is $354 million. So, actually a little bit less than where we were at last year. Last year we were at around $367 million. So, a slight decrease in expenditures and we'll walk through not only today, but as we get through the departments, the reasons behind those decreases. A couple of things I want to highlight on here, so as Laura mentioned, right at the top we are in this Fiscal Curb year. 2020 is a Fiscal Curb year where the property tax cap has gone into full effect in St. Joseph County. And you can see property taxes are expected to decrease. That's directly a result of those property tax caps going into effect. So, the decrease is about $1.4 million. It is actually better than what we were anticipating. If you remember, we came before this committee several months ago and anticipated closer to a $2 million decrease. So, it's actually a little bit better than we were anticipating. A lot of that is being driven by a stronger than expected increase in net assessed value. Weof the estimates from DLGF that are drivingnot onlyincreases in 2019 g property taxes over what we budgeted,but also in 2020 that's expected to continue. He continued, We're expecting increases in local income tax. So, if you realize that the local income tax distribution period is offset from the actual period they're actually collecting the local income tax, so theperiod we will actuallyreceive local income taxes in 2020 for the year ended June 30, 2019. So, the period in which the local income tax is actually collected is already over. The economy remained fairly strong during that period. So, we anticipate local income tax will increase in 2020. And that two-point-five-percent(2.5%) estimation is an average of the past three (3) years. So, we took an average of the past three (3) years increases and got a two-point-five- percent(2.5%)increase for the budget. A couple of things to point out in charges for services.You see a fairly strong increase there. A substantial portion of that, not all of it, but about $1.6 million or $1.7 million of that is based largely on an accounting change we are making with our Central Services Department, which we'll talk more about when we get into the Admin and Finance presentation later on today. But where we used to not recognize revenue and instead decrease expenses, we are now recognizing, or we will be in 2020, recognizing both revenue and expenses for the Equipment Services Division in Central Services. So,that increase in charges for service is offset largely by increasing in the supplies line down on the expenditures. So,that's what's driving the $1.8 million in the supplies. So, it's not a net increase, it's just sort of a difference in how we are accounting for that. He went on, Moving down to interest earnings, again, large increase expected there. That's largely driven by us being fairly conservative in our 2019 budget. Despite yesterday, or today, the Federal Reserve lowering interest rates, we do expect our interests earning on our cash on hand to remain fairly strong right around two percent(2%) to two-point-five-percent (2.5%) in 2020. And we use that expectation of about two-point-two-percent(2.2%) against our expected cash balance on each fund do derive interest earnings of right around$3 million for 2020. Moving down to transfers and inter fund reallocation reimbursements. One (1) of the stories that you will hear again and again throughout these budget presentations is that we are really working hard to contain inter-fund allocations. So,you see that there's a pretty substantial drop in inter-fund allocation reimbursement and a corresponding drop in other inter fund allocation down at the bottom on the expenditure side. A lot of that is driven byIT and a dropin the allocation for IT expenses, which we'lltalk p e about a EXCELLENCE ACCOUNTABILITY INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 227W Jefferson Bvld South Bend.Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 4