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CITY OF SOUTH BEND OFFICE OF THE CLERK Committeemember Jo M. Broden arrived at the meeting at 5:22 p.m. Mr. Parker went on, So,we're funding more of that cost from City money, from income taxes. And because less of that money, revenue is coming from the gas tax and wheel tax. So, the gas tax and wheel tax, the amount of money we expect to bring in there is not keeping pace with the expenditures for roads, so we are funding more from income tax. But even with that additional funding from income tax it's still not able to keep pace and we're spending down some additional reserves in the street maintenance Funds to the tune of about$1.4 million. That still is expected to keep us above our cash reserve requirement. So,we can handle it for 2020 but it can't be something that we do year after year after year. So, there needs to be some kind of additional discussion and we are having those discussions on how we continue to fund streets and roads year after year. So that's the first (1St) part there. He continued,And solid waste operations,right now it's showing about a$640,000 deficit. That is another area that we might be able to make it work for 2020 but the revenue for solid waste operations is not keeping pace with the growth in expenditures. So, there's going to have to be more discussions between Administration and Council about how we can adjust the operations to make those numbers work. By and large those four(4)reasons are what's driving that$10.4 million deficit. As I say in that bottom, and I'll try to break it up in the interest of time, that bottom bullet there, what we're doing with this budget and it showed by our sort of contraction in costs for$367 million down to $365 million is recognizing that we have revenue challenges that are not going to go away. Taxes are not going to be increasing at the level that we would want them to. So, we need to make sure that we're working toward long term sustainability with this budget. We are designing to make use of current resources where we can. We want to make sure that we're not sitting on money where it's not necessary as long as we have sufficient resources to draw a good bond ratingand all those things,we want to make sure we're makinguse of those current resources. But we also want to plan for the future when income taxes may not be as good as they are currently, or the economy might not be as good, and the needs may raise above where they are currently as well. So that's the goal that this is one (1) step towards the long-term sustainability. And it goes back to something Laura mentioned which is this is really getting us to a point where we are sustainably funding our operations. He went on, I did want to put this up (referencing a slide in the presentation)just so that Council members can see. This is our General Plus Fund. Which, again, is the General Fund, our Local Income Tax Fund and our Economic Development Income Tax Fund. And I did want to point out, as I mentioned, these three(3) funds are balanced. So,there is a balanced budget in these three(3) funds which can fund the primary or majority of governmental operations of the City. One (1) thing to notice here is these three (3) funds do have a significant transfer out liability. If you look towards the bottom of the expenditures section on the transfers out (referencing a slide in the presentation), we're expected to transfer out about $13 million out of these three (3) funds into other funds. Largely that's funding areas like DCI, areas like Code, that are accounted for as different funds but are funded by income tax funds. As well as from things like streets that I just mentioned that we increased our income tax for that this year. But compared to a $9.4 million transfer in, there is a net transfer out of these funds into other funds to fund additional priorities. He continued, With that, that's sort of the overall view of the finances. Laura mentioned several times there will be much,much more information as we get into each individual department. Each individual department will be going through their numbers that add up to that overall picture. So, EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 6