09/10/07 Council Meeting Minutes

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REGULAR MEETING SEPTEMBER 10, 2007 not figure into the operating budget increaseldecrease. Ms. Fanello further advised that the money goes to various departments such as Economic Development $6,190,587 or 3%; Utilities $42,899,888 or 23%; Culture & Recreation $20,826,034 or 11%; Public Works $15,765,338 or 8%; Public Safety $64,297,877 or 35%; General Government $20,560,051 or 11%; and Health and Liability Self Insurance $16,650,774 or 9%. She noted that the 2008 Expenditures by category type are Salaries & Benefits $95,910,105 or 51%; Supplies $8,877,270 or 5%; Services & Charges $73,162,135 or 39% and Capital $9,241,039 or 5% and noted that services and charges include all debt payments. Ms. Fanello stated that the general salary increases for the 2008 budget will be 2%. Some positions reviewed for market value and adjusted for ability to attract and retain qualified personnel. Therefore, some increases are suggested at levels higher than 2%. Overall, city full-time salary increases were 1.4%. This is outstanding given that salaries & benefits make up 52% of the tota12008 projected budget. She noted that there will be a reduction of 15 positions in 2008, which approximates $500,000 plus benefits in reduced costs salary reductions 2008 of 15; 2007 25.5; 2006 6; 2005 4; 200411 for a total reduction of 61.5. Ms. Fanello stated that health insurance increases in department budgets totaled less than 2%. This means that while claims cost is still increasing with the market, it is increasing at a decreasing rate. Claims are projected to trend 15% to 17% higher than in 2007. There will be a premium increase for employees ranging from 10-18%. She noted that with Anthem discounts have totaled $470,000 higher than last year (thru June 07) Employees are paying a larger share than in previous years - Employees 15% and the City 85%. She noted that restructuring our plans has proven to be beneficial so far in containing health insurance plan increases. Ms. Fanello noted that fuel costs are budgeted at $2.90 per gallon compared to the $2.50 in 2007, which equates to a 16% increase in fuel costs or $300,000. She noted that PERF employer share for non police and fire employees rose from 5.5% to 6.0% or $145,000. PERF for active Police and Fire remains at 21% but the budget increased by $163,935 for Police and $72,961 for Fire. City Pension costs for Police and Fire retirees rose $1.3 million compared to 2007. This is due to the large number of retirees in 2007. Total Pension cost increases $1.7 million. She noted that although, pension transfers were not needed in 2008 due to the reimbursement by the State of 50% drop funds, both funds will need cash transfers in 2009. This must be taken into consideration when the circuit breaker hits in 2010. Debt payments in 2008 and projected bond payments of $20.9 million, excluding TIF bonds compared to 2007 projected payments of $17.1 million. Ms. Fanello noted that one major bond to be issued in 2008 Sewer is not reflected in above total. Other possible debt is leases for vehicles and a potential new animal shelter. Ms. Fanello stated in closing this budget is a responsible budget that has tried to balance future property tax decreases while trying to retain quality personnel to provide the same level of services demanded by those paying property taxes. Councilmember Varner stated that when residents ask him why city tax bill are so high, he points out that only a portion of the tax bill goes to the city. Mayor Luecke advised that for South Bend residents, about 40 percent of the tax bill goes to the city, with the school corporation as the next highest taxing unit. He said the county, airport, Transpo, library and redevelopment also receive property tax revenues. The Mayor noted that the tax rate has declined 3.4 percent this year, but we don't what the school taxes or the county taxes are going to be. So the overall tax rate for our residents and businesses could still go up despite the good work that we've done to reduce the tax rate. This being the time heretofore set for the Public Hearing on the above bill, proponents and opponents were given an opportunity to be heard. There being no one present wishing to speak to the Council either in favor of or in opposition to these bills, Councilmember Dieter made a motion to continue these until the September 24, 2007 meeting of the Council in the Council Portion Only. Councilmember Varner seconded the motion which carried by a voice vote of eight (8) ayes.