09-14-09 Public reviews 2010 budget; Code restored to full time

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Tax revenue enabled the City to keep several facilities open, including the East Race Waterway, both city swimming pools, the Newman Recreation Center, Howard Park Ice Rink, Potawatomi Zoo, and several recreation programs, including learn-to-swim and summer activity and lunch programs. ? 56 POSITIONS CUT FOR 2010: The budget eliminates 56 positions from the City’s payroll for 2010, on top of 25 position reductions this year. Since 2000, the City has cut 206 positions or 15 percent of its workforce. ND ? NO SALARY INCREASES FOR 2 YEAR: For the second consecutive year, non-bargaining employees will not receive a pay increase. In 2009, the Mayor and all Department Heads took a 5 percent salary cut. Collective bargaining employees continue to receive previously negotiated increases. ? REDUCED HEALTH BENEFITS FOR EMPLOYEES: The City will make changes in the application of its health plan, eliminating a $500 contribution to a flexible medical spending account for each City employee ($600,000 savings) and going to an 80-20 health insurance plan ($1.3 million savings). ? FULL CUTS FOR MOST CITY DEPARTMENTS: Despite new Local Option Income Tax revenue which restored public safety and parks priorities, many City departments, especially “general government” departments, will experience the full impact of budget cuts originally anticipated before the LOIT. ? REVENUE LOST TO TAX CAPS: Even with additional revenue anticipated from the adoption of Local Option Income taxes, the 2010 budget projects a loss of more than $6 million in property tax revenue – significantly less than the anticipated loss of $22 million without the LOIT. ? NATIONAL TRENDS: South Bend’s fiscal challenges, exacerbated by the state’s property tax caps, are no different than other U.S. cities. According to the National League of Cities report, “City Fiscal Conditions in 2009,” this is “the worst outlook the report has detailed in 24 years” – 88 percent of cities say 2009 will be a difficult year in meeting fiscal needs. o 89 percent of cities say 2010 will be another difficult year. o 67 percent of cities are instituting hiring freezes or layoffs o 62 percent of cities are canceling capital infrastructure projects o 32 percent of cities are cutting services other than public safety o The report also notes that 42 percent of cities are increasing fee rates, 25 percent are creating new fees and 25 percent have increased property taxes. - 30 -