HomeMy WebLinkAbout2019 Budget Brief - 8-29-18 August 29, 2018 2019 Budget Summary and Discussion
Introduction
The 2019 budget aligns administration, council and resident
priorities. Through early and frequent engagement with Council
Members, the administration and residents, we are able to better
understand the needs of the residents and businesses in South
Bend. The budget reflects broad input and will enable the City to
continue delivering services that empower everyone to thrive.
Budget Overview
The General Fund and Local Income Tax Funds (COIT 404, EDIT
408, and Public Safety LOIT 249) will have balanced budgets in
2019. A balanced budget in these funds will help maintain our AA
S&P credit rating, which saves taxpayer dollars through very low
interest rates on bonds, leases and other financing options for
capital investments.
Some capital and debt service funds, for which the sole purpose is
to fund various capital projects, are being used as a cash source for
budget priorities. Other spend-downs are in funds where cash has
accumulated over time above the targeted reserve level (Motor
Vehicle Highway, Human Rights and other Grant-related funds).
Property tax receipts are projected to increase by roughly 1% in
2019 before an estimated 5% reduction in 2020 due to the final
phase of the state circuit breaker law going into effect. The City
continues to work with the County Assessor’s office to ensure
property taxes are fair and accurate across our community.
The overall projected Local Income Taxes (LIT) increased by
roughly 10.4% over 2018 based on DLGF estimates provided in
August. While this increase reflects growth in income, we cannot
count on this increased revenue over the long term because income
tax receipts are volatile and heavily dependent on the overall
economy.
The City’s share of the Public Safety Answering Point (PSAP) costs
have increased by 20% over 2018, which includes funding for added
personnel at the consolidated 911 center. Also, additional Medicaid
reimbursements to Emergency Medical Services (EMS) are
expected to be phased out, reducing estimated revenue by
approximately $1.1 million in 2019 and therefore requiring a transfer
from EDIT to cover the shortfall of roughly $1.5 million.
The City continues to address aging infrastructure. The 2019
budget includes a request to establish a Stormwater Utility fund with
an associated fee to customers to offset the cost to improve
drainage, control flooding, improve water quality and comply with
regulations.
With the proposed creation of a South Bend Planning Commission
and realignment of the Building Department, the 2019 budget
makes progress toward a one-stop shop for land use and
development services, as well as a centralized licensing and
registration office that will facilitate easier access to city services.
Budget Highlights
The following items are highlights for the 2019 budget:
Vibrant Neighborhoods:
o Light Up South Bend neighborhood lighting project,
including a solar lamp post pilot program ($200,000)
o Continued neighborhood cleanup efforts with Code
Enforcement involvement (funded through regular
Code Enforcement budget)
o Vacant & Abandoned continuation of efforts
($545,000)
o Significant funding for Curb & Sidewalk Program as
well as (4) new curb & sidewalk concrete positions
o Expanded neighborhood development program (new
construction and rehab) ($1.6 million)
o Small-scale development matching grant ($200,000)
o $75,000 for Community Development Financial
Institutions (CDFI) pilot program
o Substantial TIF investments planned in
neighborhoods in 2019 including:
$2 million for South East Master Plan
Implementation (pending TIF area
realignments)
$800,000 of matching funds for Coal Line
Trail project
$2 million for Western Avenue streetscape,
Falcon to Dundee
$750,000 for Portage-Elwood streetscape
$1 million Washington-Colfax apartments
$800,000 for Sherman-Harrison
development project
$550,000 for City Cemetery entrance
$400,000 for West Washington area
improvements
Resident Engagement:
o Request to insource Engagement Specialist position
o $50,000 for Neighborhood Resources Connection,
twice the historic funding level
2019 Mid-Season Budget Summary and Discussion
August 29, 2018 2019 Budget Summary and Discussion
o $25,000 for direct neighborhood engagement and
qualitative study
o $20,000 for 2020 Census outreach
Public Safety:
o Paramedicine Program Pilot ($100,000)
o Traffic Calming ($250,000)
o Quiet Zones ($350,000)
Health, Human Services, and Education:
o Federal Lead Grant match ($350,000)
o Housing Safety Inspection program ($190,000)
o Permanent Supportive Housing funding ($100,000 in
addition to CDBG funds)
o Workforce Transportation Pilot ($135,000)
o Youth Build match for US Department of Labor grant
application ($250,000)
o Lifelong Learning program match for residents
($150,000)
Capital Investments:
o $3.77 million investments in water capital projects and
$3.78 million in wastewater projects
o $1.46 million in EMS and Fire Capital investments
o Replacing up to fifteen (15) of the oldest police patrol
cars with Ford Fusions Hybrids for the Detective
Bureau (approximately $30,000 per vehicle; budgeted
to purchase over 5-year period)
Quality of Place:
o My SB Parks & Trails work continues (32 different
neighborhood parks scheduled for improvements,
including restrooms and park equipment) (part of 2017
and 2018 bonds)
o Addressing neighborhoods that do not have equitable
access to parks ($2.5 million)
o Expansion of Free WiFi ($100,000)
Business Development:
o Workforce development programing ($529,000)
o Façade Grant Program ($575,000)
o Micro loan program to accelerate starting businesses
that cannot receive financing ($100,000)
o Diversity Specialist position requested to assist with
the Disparity Study and implementation
Supporting the City Workforce and Departmental
Effectiveness:
o All non-bargaining positions’ maximum salary caps
have been increased by a minimum of 2% in the salary
ordinance. Individuals’ actual salary increases will be
based upon individual performance. All bargaining
positions are under contract until 2020 or 2021,
depending on union.
o TRANSPO Bus Passes for employees to travel to and
from work ($25,200)
o Employee Training. including harassment awareness
training as required by Council resolution ($590,000
or approximately $536 per employee)
o Working towards a paid internship program to allow
those not receiving course credit or other forms of
payment to have a meaningful, paid internship with
the City in various departments and fields of work
($231,000)
2019 Expenditure Budget Breakdown
Looking Ahead to 2020 Fiscal Curb
Looking ahead to the 2020 fiscal curb, the projected property taxes
fall by approximately $2.4 million in the General Fund and Parks &
Recreation Fund.
If nothing changed from current funding patterns, the City would be
required to tap reserves to a level that would likely lower the City’s
AA credit rating. There are a few options to stay ahead of this curb
including, but not limited to:
Continuing organization refinements within departments.
Continuing work with the County to ensure property taxes
accurately reflect market conditions and everyone is
paying their fair share.
Decreasing the number of City positions through a soft
hiring freeze (e.g. a 2.5% reduction of full-time equivalents
in the general and LOIT funds would save roughly $1.5
million from 18 positions). This can be done by reviewing
positions as they become vacant with the Mayor’s office
to ensure we are only replacing essential positions which
help us meet the needs of the City.
Maximizing efficiency in our departments to tighten
operational costs throughout the City (e.g. 1% cut would
yield roughly $600,000 of savings in the General Fund
alone).
Controlling the cost of healthcare, currently $16,900 per
employee according to our 3rd party insurance
administrator. We have taken steps in 2017 and 2018
including the implementation of innovative tools and
partners to curb spending, which seem to be paying off as
we were able to reduce the overall costs to all funds for
health insurance due to adequate reserves in 2019.
However, there is still work to be done.
Considering new revenue options to offset the fiscal curb
and growing structural deficit (i.e. grants, opportunity
zones).
Considering additional Public-Private Partnerships where
possible.
More Information
Jennifer Hockenhull, City Controller Email: jhockenhull@southbendin.gov
Phone: 574-235-9822 Website: https://www.southbendin.gov/finances
23.06%
Safe Community
for Everyone
22.02%
Robust & Well‐
Planned
Infrastructure9.44%
Strong, Inclusive
Economy
14.41%
Well‐Governed &
Administered
City
13.14%
Thriving Public
Spaces & Culture
4.34%
Vibrant,
Welcoming
Neighborhoods
0.18%
All Residents Empowered
with Education, Mobility &
Technology
13.40%
Interfund
Transfers