09-13-04 Council Meeting Minutes

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REGULAR MEETING SEPTEMBER 13, 2004 revenue to reflect the approved amount of the total levy per state statutes. General fund revenues including property taxes are expected to increase 2.9 million or approximately 4.8%. Operating expenditures are expected to increase 5.6 percent for 3.3 million dollars totaling 61 million dollars. Of this amount, public safety is approximately 76% of total general fund expenditures, that is approximately 46 million dollars out of 61 million dollars of operating expenses in the general fund. The 46 million dollar figure does not include fire and police pension expenditures or the equipment, buildings, cars and trucks needed to support their role in our community. The pension and capital expenditures are included in the total amount of expenditures, there are increases of 10.5 million for pensions and 2 million dollars in average annual capital expenditures. Average capital equipments not counting buildings that would be a total of 58.5 million dollars. Public Safety without a doubt is our highest priority and our efforts this year and over the last two years reflect our commitment. South Bend faces the same funding issues that other cities face. Our police and fire pensions continue to experience annual funding shortfalls that catch up funding that the state provided in December 2001 and the additional distribution from the public deposit insurance fund should cover until 2005. However, we should expect by 2006 and beyond to transfer funds to the pensions funds from the general fund. A significant item in the budget is our local roads and streets fund has increase of funding 3.3 million dollars. The wheel tax is responsible for the entire increase of over 2 million dollars. If we only count paving materials, we are expected to spend over 2 millions dollars, this amount does not include our road projects or the labor that the City of South Bend is spending on upgrading and maintaining our roads. We have tight spend guidelines this year to help cover higher personnel costs. Guidelines for expenditures includes a zero (0)percent increase for the third year in supplies and zero (0) percent increase in other services for the second year. With the recent increase in gas prices, we did exempt gasoline costs from these guidelines. The self-insurance employee benefit fund has budgeted no increase in health claim expenditures however, this fund is a hefty 11.6 million dollars. The 2005 budget includes six (6)funds that are not able to balance revenues and expenditures and will need to rely on fund balances. They include the Police and Fire pension funds, Century Center, Solid Waste, Water& Sewer Repair Insurance Fund and Motor Vehicle Highway. There are three (3) additional funds that cannot balance revenues and expenditures and do not have the adequate fund balances and will require other funds to provide that funding. They include the Central Services Fund,Parks Special Events Fund, and Parking Garage Fund. Either the COIT fund or Park Department Fund will have to cover these shortfalls. Edit and Coit will decrease approximately 15.3 percent or 1.1 million dollars, due to three factors. 1. One time revenues are not expected this year as we have received in the past years. 2. The Mayor recommended and Council approved the restoration of the maximum homestead credit and that will take effect in 2005. 3. The lingering impact of the recession in individual and business income along with health care costs, pensions plans as mentioned before. We have a true pension plan not a 401k, we have a benefit program which guarantees a specific dollar benefit that is not related to the investment return on those funds. The City of South Bend's required funding to the PERF state fund increase from 3.25% to 4.25% over the last two years. Mr. 011ett asked the Council for their favorable consideration of these bills. This being the time heretofore set for the Public Hearing on the above bill, proponents and opponents were given an opportunity to be heard. Councilmember Coleman stated that the Public portion of Bill Nos. 54-04; 55-04 and 56- 04 are closed and the Council will continue these three bills in the Council portion at the September 27, 2004 meeting of the Council. However, Councilmember Coleman extended the offer for Councilmembers for comment tonight or entertain a motion to continue Bill Nos. 54-04; 55-04 and 56-04 until the September 27, 2004 meeting of the Council in the Council portion only. David Varner, 5th District Councilmember, advised that he would like to take this opportunity to offer an amendment to Bill No. 55-04, which refers to Fund#377 of the College Football Hall of Fame transfer. Councilmember Varner further advised that the College Football Hall of Fame is an interesting and nice venue that Bernie Kish and his staff are fine folks, and in fact, there are millions and millions of college football fans in the nations. About 500,000 extra Notre Dame Fans after last week, you can count me 11