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Home My WebLink About2019-03-04 Educational Budget Series - Personnel & Finance CommitteeCITY OF SOUTH BEND, IN Educational Budget Series 2020 “Fiscal Curb”–Impact & Preparation City of South Bend Common Council Personnel & Finance Committee March 4, 2019 Agenda •What is the issue? •What is causing the issue? •What are we doing to address the issue? Business as Usual Scenario (General Fund, PS LOIT, COIT, EDIT) $6.3M $8.2M $9.6M $6.6M This is the scenario if no steps are taken to enhance revenue or reduce expenditures CITY OF SOUTH BEND, IN What is causing the issue? Financial Concerns for 2020 and Beyond Revenue •“Circuit Breaker” Property Tax Caps •Decline of Medicaid Supplemental Payment Adjustment for EMS •Changes in Gasoline Tax Distribution Operating Expenditures •Salary & benefit costs continue to rise, particularly the cost of health insurance •Costs of maintenance for streets, curbs & sidewalks continues to outpace revenue Capital Expenditures •Large-scale projects already underway (MySB Parks & Trails) •Continuation of large-scale upgrades in infrastructure (particularly sewers) Revenue Business as Usual Scenario (General Fund, PS LOIT, COIT, EDIT) $6.3M $8.2M $9.6M $6.6M This is the scenario if no steps are taken to enhance revenue or reduce expenditures Operating Revenue Projections (All Funds) Note: Excludes Transfers In, Interfund Allocation Revenue, Debt Proceeds, and Payment in Lieu of Taxes from Water/Wastewater Overview of Property Tax Calculation Total Tax Rate of All Units Net Assessed Value (NAV) Circuit Breaker Maximum Tax Circuit Breaker Cap (1%, 2%, or 3%) Taxes Due to Property Tax Cap Exempt Tax Rates Gross Annual Taxes Gross Assessed Value Tax Cap Exempt Rate Net Assessed Value (NAV) Net Annual Tax Bill Circuit Breaker Property Tax Caps (Examples)Homestead Commercial Property Tax Projection Impact on Net Revenue in 2020 -$1.93 Million Medicaid Supplemental Payment Adjustment Gasoline Tax Distribution Changes Local Income Tax (LIT) Revenue Although current projections show that Income Taxes will increase, this is highly dependent on underlying economic conditions. Operating Revenue Projections (All Funds) Note: Excludes Transfers In, Interfund Allocation Revenue, Debt Proceeds, and Payment in Lieu of Taxes from Water/Wastewater Revenue Projection Summary (All Funds) 2016 2017 2018 2019 2020 2021 2022 2023 Actual Actual Actual Budget Projection Projection Projection Projection All Revenues Excluding Transfers In, Interfund Allocation Revenue, and PILOT Operating Revenue Property Taxes 76,708,415$ 77,136,347$ 80,788,795$ 78,885,295$ 75,743,221$ 77,187,482$ 77,871,467$ 78,446,801$ Local Income Taxes 31,463,184 28,360,244 32,712,559 32,412,051 33,180,368 33,967,696 34,774,524 35,601,355 Charges for Services 79,691,230 81,105,673 82,955,684 85,908,401 87,407,972 87,820,144 88,241,295 88,428,286 Other Taxes (Auto Excise, Liquor Excise, Cigarette, Gaming)25,491,251 26,286,410 27,016,495 26,597,029 26,328,178 26,048,163 26,070,800 26,201,936 Other Operating Income (Licenses, Permits, Fines, Fees, etc.)10,521,639 8,865,314 13,392,697 5,388,762 5,374,488 4,813,077 4,827,503 4,865,006 Total Operating Revenue 223,875,719 221,753,989 236,866,230 229,191,538 228,034,226 229,836,563 231,785,588 233,543,383 Non-Operating Income Interest Earnings 2,118,037 2,218,568 4,751,950 2,555,222 2,396,966 2,389,643 2,383,394 2,373,912 Donations / Grants 7,402,805 5,807,232 7,694,983 11,482,380 7,841,880 7,604,086 7,601,631 7,615,931 Total Non-Operating Revenue 9,520,841 8,025,800 12,446,933 14,037,602 10,238,846 9,993,729 9,985,025 9,989,842 Debt Proceeds Debt Proceeds - 43,629,978 23,645,347 2,034,625 1,713,480 2,151,400 2,205,510 2,010,805 Total Debt Proceeds - 43,629,978 23,645,347 2,034,625 1,713,480 2,151,400 2,205,510 2,010,805 Total Revenues 233,396,560$ 273,409,767$ 272,958,510$ 245,263,765$ 239,986,552$ 241,981,691$ 243,976,122$ 245,544,030$ Operating Expenditures Business as Usual Scenario (General Fund, PS LOIT, COIT, EDIT) $6.3M $8.2M $9.6M $6.6M Operating Expenditures (Business as Usual) Operating Expenditures (All Funds) Note: Excludes Transfers Out, Interfund Allocations, PILOT, and Capital Expenditures Operating Expenditures By Department 2016 2017 2018 2019 Budget 2020 (Proj.)2021 (Proj.)2022 (Proj.)2023 (Proj.) All Expenditures Excluding Transfers Out, Interfund Allocations, & PILOT Operating Expenditures MAYOR 666,792$ 696,477$ 859,267$ 904,318$ 976,360$ 860,678$ 876,395$ 892,540$ CITY CLERK 370,676 407,295 426,383 449,936 502,483 511,445 520,589 529,914 COMMON COUNCIL 514,741 468,011 552,203 733,136 704,877 664,980 667,145 796,373 ADMINISTRATION & FINANCE 11,372,800 10,303,783 10,743,103 7,405,899 7,521,364 7,546,526 7,625,246 6,855,039 LEGAL 964,762 976,037 1,009,894 1,182,299 1,267,490 1,292,005 1,317,012 1,342,526 PUBLIC WORKS 61,468,325 66,302,464 64,886,398 71,956,621 71,559,127 71,260,337 72,276,237 69,917,734 POLICE 38,543,471 40,624,232 40,665,901 43,381,019 42,123,006 44,219,479 43,791,279 43,979,644 FIRE 33,177,508 33,993,790 34,741,406 35,341,625 36,931,282 37,531,098 38,033,258 38,477,750 COMMUNITY INVESTMENT 20,926,874 30,241,022 20,940,376 20,680,898 20,223,913 20,438,701 20,190,535 20,258,197 VENUES, PARKS & ARTS 16,153,845 20,523,982 21,315,774 24,091,662 21,029,606 21,260,561 21,554,242 21,916,946 CODE ENFORCEMENT 3,190,140 2,822,386 3,225,272 3,803,781 3,983,362 3,994,630 4,010,138 4,011,195 BUILDING DEPARTMENT 1,046,442 1,121,783 1,155,413 1,093,156 1,209,955 1,230,774 1,232,342 1,237,031 INNOVATION & TECHNOLOGY 474,649 3,573,785 5,769,405 7,745,183 7,471,427 7,642,147 7,566,116 7,607,024 OTHER 236,243 4,171,452 3,845,719 3,590,387 3,586,403 3,575,074 3,571,342 3,566,334 Total Operations 189,107,269 216,226,500 210,136,512 222,359,920 219,090,655 222,028,435 223,231,876 221,388,247 Note: Excludes Transfers Out, Interfund Allocations, PILOT, and Capital Expenditures Operating Expenditures By Department Note: Excludes Transfers Out, Interfund Allocations, PILOT, and Capital Expenditures Health Insurance Expenditures Capital Expenditures Capital Expenditures Capital Expenditures by Department 2016 2017 2018 2019 Budget 2020 (Proj.)2021 (Proj.)2022 (Proj.)2023 (Proj.) Capital Expenditures MAYOR -$ -$ -$ -$ -$ -$ -$ -$ CITY CLERK - - - - - - - - COMMON COUNCIL - - - - - - - - ADMINISTRATION & FINANCE - - 105,364 - - - - - LEGAL - - - - - - - - PUBLIC WORKS 18,264,554 8,627,300 7,780,777 17,790,625 9,209,980 7,747,900 6,082,010 6,945,305 POLICE 30,787 161,829 2,243,205 545,000 545,000 545,000 545,000 545,000 FIRE 883,236 1,243,760 3,423,990 1,460,000 1,990,000 1,020,000 2,780,000 780,000 COMMUNITY INVESTMENT 20,061,992 23,720,803 26,120,160 20,144,173 10,711,980 8,859,314 8,498,741 11,175,015 VENUES, PARKS & ARTS 215,076 1,504,616 5,348,644 10,791,605 875,758 320,606 250,918 321,236 CODE ENFORCEMENT 70,285 2 152,627 125,000 80,000 220,000 225,000 195,000 BUILDING DEPARTMENT - - 65,670 - 50,000 - - 53,000 INNOVATION & TECHNOLOGY - - - - - - - - OTHER - 4,134,811 - - - - - - Total Capital 39,525,930 39,393,121 45,240,437 50,856,403 23,462,718 18,712,820 18,381,669 20,014,556 CITY OF SOUTH BEND, IN What are we doing to address the issue? Revenue Revenue Opportunities Refine revenue projections Work with County to ensure that assessments reflect true valuations Continue to prioritize investment in Economic Development initiatives Pursue new grants and identify sustainable funding prior to undertaking new obligation Identify new, sustainable revenue sources Operating Expenditures Soft Hiring Freeze Average Cost per Employee (Salary & Benefits) $86,780 Health Insurance Costs Structure & Plan Design Workplace Health Data Analytics & Care Management Centralized Services Central Services •Encourage departments to use less expensive Central Services (Equipment Services, Facilities, Print Shop, etc.) when possible. •Continue to analyze cost savings gained from Central Services Central Purchasing •Refine centralized purchasing structure to identify unnecessary spending and use City’s buying power to pursue greater discounts. Innovation & Technology •Work with Department of Innovation & Technology to identify areas for software consolidation or gaining of efficiencies. Continuation of Culture Change •The 2% exercise •If you had to, how would you cut 2% of expenses from your department (with the smallest impact on services)? •If you had 2% more in your budget, what would you do with it? •Draw a distinction between “Need to Have” and “Nice to Have” •New Spending is exercise in prioritization Operating Expenditures By Department 2016 2017 2018 2019 Budget 2020 (Proj.)2021 (Proj.)2022 (Proj.)2023 (Proj.) All Expenditures Excluding Transfers Out, Interfund Allocations, & PILOT Operating Expenditures MAYOR 666,792$ 696,477$ 859,267$ 904,318$ 976,360$ 860,678$ 876,395$ 892,540$ CITY CLERK 370,676 407,295 426,383 449,936 502,483 511,445 520,589 529,914 COMMON COUNCIL 514,741 468,011 552,203 733,136 704,877 664,980 667,145 796,373 ADMINISTRATION & FINANCE 11,372,800 10,303,783 10,743,103 7,405,899 7,521,364 7,546,526 7,625,246 6,855,039 LEGAL 964,762 976,037 1,009,894 1,182,299 1,267,490 1,292,005 1,317,012 1,342,526 PUBLIC WORKS 61,468,325 66,302,464 64,886,398 71,956,621 71,559,127 71,260,337 72,276,237 69,917,734 POLICE 38,543,471 40,624,232 40,665,901 43,381,019 42,123,006 44,219,479 43,791,279 43,979,644 FIRE 33,177,508 33,993,790 34,741,406 35,341,625 36,931,282 37,531,098 38,033,258 38,477,750 COMMUNITY INVESTMENT 20,926,874 30,241,022 20,940,376 20,680,898 20,223,913 20,438,701 20,190,535 20,258,197 VENUES, PARKS & ARTS 16,153,845 20,523,982 21,315,774 24,091,662 21,029,606 21,260,561 21,554,242 21,916,946 CODE ENFORCEMENT 3,190,140 2,822,386 3,225,272 3,803,781 3,983,362 3,994,630 4,010,138 4,011,195 BUILDING DEPARTMENT 1,046,442 1,121,783 1,155,413 1,093,156 1,209,955 1,230,774 1,232,342 1,237,031 INNOVATION & TECHNOLOGY 474,649 3,573,785 5,769,405 7,745,183 7,471,427 7,642,147 7,566,116 7,607,024 OTHER 236,243 4,171,452 3,845,719 3,590,387 3,586,403 3,575,074 3,571,342 3,566,334 Total Operations 189,107,269 216,226,500 210,136,512 222,359,920 219,090,655 222,028,435 223,231,876 221,388,247 Note: Excludes Transfers Out, Interfund Allocations, PILOT, and Capital Expenditures Capital Expenditures Capital Budgeting Process Identification of Potential Projects Project Evaluation (Financial & Non-Financial) Formal Consideration of Ongoing Project Operations Cost City-Wide Process CITY OF SOUTH BEND, IN Questions?