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HomeMy WebLinkAbout08-14-19 SOUTH 44, PEACE . 1865 OFFICE OF THE CITY CLERK DAWN M.JONES, CITY CLERK PERSONNEL &FINANCE AUGUST 14, 2019 5:30 P.M. Committee Members Present: Karen White, John Voorde Committee Members Absent: Regina Williams-Preston, Jo M. Broden Other Council Present: Tim Scott, Jake Tesha, Sharon L. McBride Other Council Absent: Gavin Ferlic, Dr. Oliver Davis Others Present: Jennifer Coffman Presenters: Dan Parker, Aaron Perri, Jeff Jarnecke Agenda: Budget Hearing: Venues, Parks &Arts Committee Chair Karen White called the Personnel and Finance Committee Meeting to order at 5:30 p.m. She introduced members of the Committee and stated, We do not have a quorum. I would like to share with each and every one of you Councilmember Jo M. Broden will not be here. Judge Broden's mother passed yesterday so we do ask for your prayers and your thoughts for the Broden family. We will now entertain any comments from our City Controller Dan Parker as we enter the third(3`d)budget hearing, which is Venues Parks & Arts. Dan Parker, City Controller with offices on the 12th floor of the County-City Building, stated, Thank you, Councilmember White.This is our third(3`d)budget hearing and it is for Venues Parks & Arts. This follows Public Works from last week. I did want to let the Council Members know that there were a multitude of questions for Public Works and so we are still compiling the written responses for the Public Works budget hearing,but we will do that,get those put together and sent out within the next several days. I just wanted to mention of that. With that, I will turn it over to Aaron Perri for Venues Parks &Arts. Aaron Perri, Executive Director of Venues Parks & Arts with offices located at 301 South St. Louis Boulevard, stated, Thank you Dan, and thanks for all your work that your office is putting into this process. I appreciate it. In the packet in front of you(which is available in the City Clerk's Office),we'll go through a presentation that we've been able to put together. A few weeks ago, we talked about our current accomplishments and some of our ongoing goals, so today will be primarily about the numbers, as I believe it was the intention of the Committee meeting. But, I would just like to underscore a few things regarding where we're heading next year. We're going to really near the finish line of the My SB Parks & Trails Initiative. I think everyone received a save the date for the Howard Park grand reopening happening on November 29th. That's Black INTEGRITY SERVICE'ACCESSIBILITY JENNIFER M.COFFMAN BIANCA L.TIRADO GRAHAM D.SPARKS CHIEF DEPUTY/DIRECTOR OF OPERATIONS DEPUTY/DIRECTOR OF POLICY ORDINANCE VIOI.AIION CLERK EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Blvd.I South Bend,Indiana 46601 I p 574.235.92211f 574.235.9173 I www.southbendin.gov •CITY OF SOUTH BEND OFFICE OF THE CLERK 0 Friday. We should have about ninety percent(90%) of these projects done by the end of this year. I'll outline the few that are remaining towards the end of the presentation. He continued, We're going to be entering year four(4) of five(5) of our strategic plan. We should have by the end of this year sixteen (16) of the thirty-one (31) initiatives that are outlined, completed. Next year we'll focus heavily on employee engagement, customer service training and things of that nature. I'll cover that a little bit later.We're looking to improve and expand the impact of our convention center and Morris Performing Arts Center.Jeff has some time to talk about what that looks like. Increased partnerships, and the giving program that we've done. Over$12 million dollars in the past five (5) years has been brought in through grants and partnerships. We want to continue down that path and focus heavily on our impact drivers. Everything you'll see and hear us talk about, each one (1) of the numbers is reinforced by one (1) of these four(4)impact driver areas that we talk about. Whether it be social equity and the unity that comes from making sure all residents are served and have programs that are accessible, economic impact and neighborhood improvements, health and wellness, and then of course environmental stewardship. Each number is backed up by some of those things. He went on,What we'll do to start is look through the Venues Division headed up by our Executive Director of Venues, Jeff Jarnecke. You'll see the Morris, the Palais, Century Center, and parking garages embedded in this. I'll come back and present the things that have traditionally been thought of as the Parks and Recreation budget. Committee Chair White stated, I'm going to ask the Council Members,would it be beneficial after each major presentation that we give the Council the opportunity to ask questions? Then we move to the next section. Mr. Perri replied, Perfect. Jeff Jarnecke, Executive Director of Venues with offices located at 120 Dr. Martin Luther King Jr. Boulevard, stated, Aaron, thank you very much. We'll start with the Morris. We're pleased to bring to you a budget that,in short,is going to increase revenues and decrease expenses,decreasing the reliance on the General Fund. The Morris, which as we're working up to the one-hundredth (100`h) anniversary of the Morris Performing Arts Center in 2022, has around a $6 million economic impact for the City of South Bend. We're approaching one-hundred(100)events for this year with the goal of getting to one-hundred twenty-five (125) events within the Morris by the time that we're to 2022. So, a lot of terrific work being done by our team on the Morris side of it. He continued, That budget, overall, is before you. The specific details sheet is on slide ten(10) or on page ten (10), excuse me, through thirteen (13), but I'll just touch on the high-level items in terms of the Fund#101. Revenues, we're anticipating to increase by about one percent (1%). That was a conservative approach because the Morris remains largely a rental facility. Although, we're in a position where we can now own and self-promote our own event. So, we will announce that event later this year and continue on in the future with some events, perhaps one(1)a quarter that we'll own. But we're largely a rental facility that leans on our partnerships with Broadway Theater League, American Theater Guild and then the South Bend Symphony. He went on,This coming year you'll hear more about this in short order if you haven't already,but Lion King is coming in March,so a three(3)week lineup of Lion King. For comparative purposes, EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 2 CITY OF SOUTH BEND OFFICE OF THE CLERK back in 2016 when the Morris hosted three (3) weeks of Wicked, a presentation of Wicked, we returned more than $400,000 to the General Fund. So, we're anticipating a very good year so it's a conservative approach relative to revenue. He continued, On the expense side of it, you're going to see a four percent (4%) decrease. That four percent (4%) decrease is accounted for by a number of efficiencies that we're now able to realize within the Venues Division by the sharing of resources between the Century Center and Morris as well as then some accounting relative to personnel. With that, it brings us to just around $100,000 net operating loss for fiscal year 2020. That's being planned for and that is a significant decrease in terms of a year over year comparison from what we presented to you in 2018 for the 2019 budget. Again, largely being able to realize some efficiencies on the expense side of it as well as we're anticipating a very good year on the revenue side. He went on, Concerning more on the Palais side of it, the next slide that's before you(referencing a slide in a presentation which is available in the City Clerk's Office) focuses on the Palais side. The Palais has a $2.5 million dollar economic impact on the community. Navarre Hospitality remains our operator so they not only execute the events but they sell the space on our behalf as well. We're not delivering top line revenue like we expect, and we need to within the next space. That's being built off of around fifty(50) events this year. In our minds,we need to be somewhere between that sixty-five(65)and seventy(70)number within the Palais so we're falling short of our expectation but we're working with the Navarre team in coming up with strategies to adjust that going forward. You are seeing an anticipated decrease of what we have on the books already for 2020 on the revenue side of it. He continued, But on the expense side we are going to shift our personnel. That conversation and that discussion with the folks at Navarre, they understand things cannot remain the same. We're going to realize some of those efficiencies that I mentioned and reassign staff within the Venues Division to better account for and right-size our operation within the Palais. All of that though, we're pleased to be able to decrease the reliance on the General Fund and decrease our anticipated net operating loss to around $142,000 next year as part of the 2020 budget. That information in detail on the Palais operation is on page fourteen (14) within the packet that's before you. Councilmember White, I'm happy to take any questions related to Morris and the Performing Arts Center. Committee Chair White opened the floor to questions from Council Members regarding the Palais and the Morris. Committeemember John Voorde stated, On my way in I asked about the new seating in the Morris and you said that that's anticipated. Probably not next year though, correct? Mr. Jarnecke replied, We are working on some renders right now of what the building and the construction work would look like. We haven't announced the number associated with the campaign. We plan to privately fundraise dollars associated with the celebration of the next one- hundred(100)years. So,what we're anticipating with that is a capital campaign that would launch later this year that we would seek benefactors and donors to participate in that program.That would not only address probably in some part mechanicals and those sorts of things within the building that are going to be needing replacement, but also re-imagining the plaza area upfront, re- imagining the box office area,new seats within the theater,new LED lighting,new other elements EXCELLENCE ; ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 I 0574.235.5567 www.southbendin.gov 3 •CITYOFSOUTHBENDOFFICEOFTHECLERK to ensure our next one-hundred(100) years are as successful as this one-hundred(100) years. But to your question, we have blacked out time in our calendar already in 2020 and in 2021 so we can get all of our construction projects done during those times so that by the time we get to 2022 it's a celebration of the past one-hundred (100) years and forward looking to the next one-hundred (100) years. Mr. Jarnecke continued, Also, as part of that, we're excited to include as part of that capital campaign effort, a maintenance endowment such so that we never have to raise funds within the Morris again. We'd be able to rely on a maintenance endowment going forward. But, we'd also have a youth endowment so that we would be able to bring maybe some of those generations that have missed their experience in the Morris in the last handful of years that we're able to build our own programing to provide tickets to kids to enjoy the Morris to ensure that it's almost a right-of- passage for the greater South Bend area. Every child in South Bend can enjoy the Morris in some form or fashion going forward. Committeemember Voorde asked, How's the ceiling repair going? Mr. Jarnecke replied, Ceiling repair is still needed. Sadly, we went to bid and did not receive any bids for that work. We went to open market and were not able to identify a vendor that would handle that work for us. And so unfortunately, and fortunately I suppose,our calendar is now busy enough that we don't have a long enough window to get the work done this year. So now work is scheduled for next year in July as part of this and we're going to go back out to bid later this year to identify the contractor. As we work through it with the contractors that expressed interest, they were worried about their own calendar and their own timeline based on some of the complexities associated with the work that we weren't able to find a qualified vendor. Or no qualified vendor submitted a bid for that,so unfortunately the work is going to remain unfinished right now but will be done next year as part of some of the other renovation projects. Happy to say that while the net is still in place there have not been any other issues with the ceiling. Committeemember Voorde followed up, One(1)more thing,is it your group that's responsible for the new message board there over the walkway? Mr. Jarnecke replied, It is our group. It is part of the Century Center efforts. Committeemember Voorde stated, Oh, okay. That's great. Councilmember Sharon L. McBride asked, When you talk about shifting personnel, can you elaborate more on that? What does that look like? Mr. Jarnecke replied, Sure. On the Palais side, we have three (3) full-time staff members that are associated with or work there.We have an individual that assists the Navarre staff in the scheduling of the room and the fielding of incoming calls.Then we have two(2)individuals that are associated with event set up and event technology meaning running the PA,the lights and those things for the events. In our discussions with the folks at Navarre, we're reassigning one (1) of the individuals that's responsible for setup to assist more and be in the full-time side in the Morris as compared to sharing responsibilities with the Palais and the Morris. We'll remain our headcount levels, just reassign those responsibilities, employing that headcount and, therefore, the expense of that individual will be off the Palais books and will be assigned to the Morris side of the ledger. EXCELLENCE j ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TT0574.235.5567 www.southbendin.gov 4 40 CITY OF SOUTH BEND I OFFICE OF THE CLERK Councilmember McBride followed up, With both of them being at a net loss, what is the benefit? What would be the economic gain? Mr.Jarnecke replied,The economic gain is largely an accounting measure as it relates to the Palais side. So,while it's a reduction of expense on that,we were better able to absorb that because of the increase in revenues and the other efficiencies on the Morris side of it. There is also a position at 0 the Morris that is now being shared with the Century Center, as well. Fifty percent (50%) of that position is being funded by the Morris and fifty percent (50%) of that position is being funded by the Century Center. Part of the original concept about Venues, Parks & Arts was to realize some efficiencies. But in the Venues Division we're now able to do that by sharing personnel across divisions and across buildings. Councilmember McBride stated, Okay. Thank you. Last year, 2019, what was the net loss or profit? Or is it this year? Do you have those? Mr. Jarnecke replied, Last year we ended up,while there's a bit of an accounting issue,in the black around$177,000. We've budgeted more around$180,000 in terms of the anticipated net operating loss but from running one-hundred two(102)events through the Morris and last year we were able to result in$177,000 in the black. Councilmember McBride stated,Thank you. Lastly, are there any jobs in 2019 completed that are anticipated to be rolled over or carried over into 2020? Mr. Jarnecke asked, In terms of construction projects? Councilmember McBride asked,And does that money stay there or does it go into other line items? Mr. Jarnecke replied, We do have funds available. We were able to complete those that were anticipated in 2019 or we will later this year. That includes the precast concrete work that's underway right now. Sealing some of the joints in the west part of the building where we're seeing some leaks. That's around a$14,000 expense. And then we're preparing with the City Engineering Department to go to bid for handrails in the first(1st), second (2°d), and third(3'd)balconies of the upper area of the theater. We're waiting for those bids to come back. We anticipate that being done by the end of the year. If we're not able to afford all those projects through our Capital Fund,which is a non-reverting fund, then we would add that to the 2020 projects as well. Councilmember McBride stated, Okay. Thank you. Committee Chair White asked,Are there any other questions? I just have a couple.You mentioned that part of your strategy moving into 2020 would be to increase revenues, decrease expenses and have less reliance on the General Fund. You have projected increasing the rental part of the Morris and also more events. Do you have a plan that you could begin to gauge, say as we look at 2020, every quarter if you're not meeting those thresholds, how would you respond so that at the end of the fiscal year you would not necessarily be looking at deficits in these areas? What happens if you don't meet those thresholds? Mr. Jarneke replied, The challenge for us as it relates to revenue is the variability of our business. Since the vast majority of our events are rental events we can't make someone rent the building if EXCELLENCE ACCOUNTABILITY i INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 5 •CITY OF SOUTH BEND OFFICE OF THE CLERK they don't want to. So, we're continuing to question and strengthen those relationships with the promoters that we have in area. We lean heavily on our relationship with Broadway Theater League,which will have four(4)events over their calendar year, so four(4) during a true calendar year and fiscal year for us where we realize the majority of our revenue. Revenues always make us a bit anxious with those because of the lack of predictability that's associated with it. But as we look at the trends we feel reasonably confident that we would attract those numbers. Mr. Jarnecke continued, On the expense side though, there is a fair amount of variability that is associated with that if we don't have the events we can minimize expenses in part-time labor that comes in to clean the building, part-time box office labor. So, if we don't have the same number of events and we're not selling as many tickets,then we need less labor to do those.There is a way for us to control expenses associated with that are directly correlated to the events that we're bringing in. Committee Chair White stated, You said the first six (6) months you'll be in a position because I know a lot is relying on The Lion King. That probably will be a very positive experience for the City and for our citizens.At that point after that I would recommend that again, you probably have already given thought to this,just to look at where you're at financially and to where you need to move in the last six (6)months of 2020. Mr. Jarnecke replied, Without question. I believe the first (1St) quarter will be front loaded for us in a very,very meaningful way.Then typically our June,July,and August are some thinner months for us based on the additional competition that we see from county fairs, from outdoor venues,and other things that aren't in existence. Then, we are into the winter months. Committee Chair White stated, Okay. Thank you. Councilmember Jake Teshka stated,I apologize that I was a little tardy so if you've already covered this, forgive me. Is raising the surcharge an option? Mr. Jarnecke replied, It is an option. We're cognizant, because of the relationships that we have with promoters,that we're in a price sensitive market. We look at it and the promoters are looking for rebates on top of that. With our deal and our ticket provider there are other fees that are baked into it. So certainly, it is an option to increase the fees that are associated with it. It just becomes that balance of what the tipping point is and where that consumer will no longer purchase the tickets to go to that show. Councilmember Teshka followed up, Sure. I totally get that. It just seems like we're right there. Right?You're not talking losses in the multiple hundreds of thousands, right?We're talking about something that I think might be a little bit of expenses here and then maybe raising the surcharge. We could get to that break-even point. I don't know, but you guys know much more than we do about the market and all of that, but it seems like one dollar ($1), dollar fifty ($1.50), something like that might go a long way on that surcharge. Mr. Jarnecke stated, I think that's certainly one (1) strategy, Councilmember Teshka, as we look at that, that we will employ when we're able to. Some of that wiggle room could be with certain shows. The other area where we're challenging, I'm challenging the team and we're pleased to add a full-time marketing manager that's from the Experience Division that's joining us now and EXCELLENCE ACCOUNTABILITY INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 1227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 1574.235.9173 TTD574.235.5567 www.southbendin.gov 6 SCITY OF SOUTH BEND I OFFICE OF THE CLERK dedicated to the Morris side of it. But the majority of our shows are somewhere between 1,400 to 1,700 attendees. If we're able to increase that and get our average show from 1,700 to 2,000 and increase that so now we're driving a per caps, we're buying popcorn and drinks and soda and beer. We're putting three hundred (300) more people into downtown that are parking and filling our garages, that we'll look at in the #601 account coming up, that we're able to shift that to. So now with dedicated resources that are focused on marketing and we're able to drive our attendance up on an average show to get closer to a sell out at 2,564,then we're going to be in a stronger position as well. To be able to further control some of those incremental costs that could be there. Councilmember Teshka stated, Last year when we sat here, I brought to you a desire for my son to have Paw Patrol Live come back and I just wanted to say thank you because we've got our tickets for November. We're all set. We're ready to go. Mr. Jarnecke stated, You're very welcome. And your son may not like the gift but on behalf of the Venues Parks &Arts team, historically through the years there's a gift from our team to you all as an appreciation for your continued hard work and support of the Venues Parks &Arts division. Committeemember Voorde stated, The Palais really isn't in competition with Century Center. But let's say there's an event like the Studebaker National Museum annual dinner. How does it work? Do you try to steer them one (1) way or another? Do they want to be in the big place overlooking the river? Mr. Jarnecke answered, That's an interesting one (1). I think typically, and in the experience that we've had with the event organizers, they have a desired look in mind. So, whether they want the windows and the experience of the river and the lights and something a bit more contemporary, they're probably focused more on the Century Center. As compared to, while it's a wonderful and beautiful experience, the ballroom is much more stately and organized. That room holds up to six hundred (600) for dinner as compared to a variety of rooms and sizes that we have within the Century Center. Without question, we refer a business back and forth. If we're not available at a given date,we send them to the other venue for sure and try to help them along the way. But other factors go into that. Many like the parking that's associated with the Century Center and the ability to park all four-hundred(400)guests outside in the lot,or four-hundred(400)cars in the lot. Being able to walk right across the street from the Courtyard and the Double Tree that's connected. So, there are a variety of factors, but the sales teams are aligned and do refer business back and forth to both sides. He continued, We're pleased to share a lot of continued excitement and great work by the Century Center team. $13 million dollar economic impact and I'm going to touch on eSports here in just a minute. Over the last two (2) years we've put $2 million dollars into that building and as Councilmember Voorde was joining with us, there are expansion hopes and dreams for the future but nothing eminent right now. We're a long way off from having that. We have a plan around it but many, many more discussions are needed before anything is realized there. But one (1) part that you'll hear more when we're presenting too that Hotel/Motel Tax Board of St. Joseph County. Next week we have an initial approval from the county side of that and the allocation committee is a$2 million dollar investment to the Bendix Theater. So,a room that is a bit dated as it is today. A room that's limited in its functionality,but a room that has incredible potential. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION ; EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 7 CITY OF SOUTH BEND OFFICE OF THE CLERK He went on, And so we are going to embark upon a $2 million dollar renovation of that space to be able to host eSports here in South Bend. We will be an early adopter to having brick and mortar that's dedicated to eSports. What I mean by that is the active gaming that can be one (1) person against one(1)person or a team of six(6) against a team of six(6). By way of example,they filled the United States Tennis Association Center court in Flushing, New York where the prize was $3 million dollars to a sixteen(16)year old that won that competition. So,while we're not necessarily awarding$3 million dollars anytime in the future,what that means and how that's coming together is just incredible in terms of the response that we've had with stakeholders along the way. Presuming that the funding all lines up for that, you could see us with that restoration starting as of January 2 and then being in the spot where we would have gaming taking place within the Bendix sometime mid-summer of 2020. Mr.Jarnecke continued, I should also say that does not diminish or limit the ability for our existing stakeholders to have a meeting in there, to have church service in there on Sunday morning,to do anything they're doing in there today,but do it better. So,our existing stakeholders have reaffirmed their commitment to staying with us and to using that room even more. We're able to introduce a new revenue stream while maintaining the existing business in this space and we're really proud and excited about that development. Fund #670, which is on page seventeen (17), I've got in the presentation you have before you, significant growth. I'm pleased to share that we're now out through 2023 with books or events on our books at the Century Center where a number of years ago where we weren't in that position at all. We're going to book more than 15,000 almost 16,000 hotel rooms within the community to drive that economic impact. So,I'm really proud of the team's effort and our relationship with SMG, who's responsible for the sales and marketing, food and beverage, and event management in addition to the City staff that help run the building. With that, because it just takes that much more food to run those events and that much more labor to run those events, we're going to see expenses increase as well within the building by seven percent (7%). But, pleased to be in a spot where we're almost breaking even on that $5 million dollar budget overall. Mr.Jarnecke went on, I should note that we're not asking for this$57,000 to come from the General Fund. Century Center at this point in time is not reliant on the General Fund. We will hopefully close that gap and be in a spot that we were this past year where we're in the black as well to the tune of almost $200,000 in the Century Center operation. We will fund that either out of the existing cash reserves or capital on the Century Center. But wanted to bring that to the Council's attention. The work and the budget associated with the Century Center for next year. This is the one(1)brief slide(referencing a slide in the presentation)relative to the Century Center. I'm happy to answer any questions from the board. Councilmember Tim Scott asked, Are you seeing any increases due to the new hotel space? Mr. Jarnecke replied, Without question. Councilmember Scott followed up, Do you guys get updates on the occupancy of those hotels? Mr. Jarnecke replied, We do. Councilmember Scott then asked, How's that been? EXCELLENCE ACCOUNTABILITY 1 INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 I Ili 574.235.5567 www.southbendin.gov 8 CITY OF SOUTH BEND I OFFICE OF THE CLERK Mr. Jarnecke replied,Occupancy,the struggle we're facing is accounting. It is a bit in a tough spot. We've seen an eight percent(8%)increase in hotel rooms within St. Joseph County overall,which means that we're closing in on 5,000 hotel rooms within St.Joseph County. Occupancy right now is around fifty-two percent (52%) within the county, so we're not at the performance level where the hoteliers certainly want to be. And whether that's early indication of recession, I don't know. We're anxious for that.The downtown hoteliers though were at about an eight percent(8%)to nine percent (9%) contribution margin of what we're adding to their existing inventory so if you think that if Century Center wasn't there those hotels would have to make up nine percent (9%) of their overall room nights. That would be a big gap for them. So, they are positive. We have great relationships with three(3) downtown hoteliers. They rely heavily on the footprint of the Century Center and the work between Visit South Bend Mishawaka and our sales staff as well. Councilmember Scott followed up, What was the impact to the Century Center from the Zoo and their moves that they made down state? Mr. Jarnecke answered, It's a challenging one (1) for us longer term. It's caused certainly the hotel/motel tax support along with Visit South Bend Mishawaka and some of the Century Center is a beneficiary and a name beneficiary of that six percent (6%). So, the near-term impact means that the Hotel/Motel Tax Board is funding, as of July 1, both Mishawaka and the Zoo out of reserves. Longer term that means that we won't have as much available to us,meaning the Century Center and Visit South Bend Mishawaka of that six percent (6%) in the future. So, we're nearing certainly within the next sixteen(16)months. Some are bigger decisions that are going to be made to that. I mentioned earlier, relative to the experience, we do think the timing is right to look at a strategic plan that may or may not include expansion, may or may not include requesting the increase of the tax rate within St. Joseph County from six percent (6%) to some percent north of that to help not only offset that but be a strategic approach for a long-term solution within. Councilmember Scott followed up, So it's a true flat six percent (6%) from us from Hotel/Motel, right? Mr.Jarnecke replied, Six percent(6%)is what the Hotel/Motel Tax is. Currently at Century Center in a given year it is receiving somewhere between$2.5 to $3 million dollars of that, so roughly it's a round number, there's a million dollars associated with each percentage. Committeemember Voorde asked, In terms of this re-imagining of Century Center there's been some discussion I know about the relocation of the Art Center. Is that active? Do you think we'd lose business at Century Center from a convention standpoint because we need more room? Mr. Jarnecke replied, I wouldn't say we're losing business because of having an Art Center,by any stretch. Do we lose business because we could use more space? Yes. That is as our shows are growing and want to grow, especially consumer facing shows, we run the risk of losing them to Ft. Wayne, Kalamazoo, Grand Rapids, or Indianapolis. Arguably, the Art Center space wouldn't necessarily be the right space they need to grow in anyway, so there is that component of it. It's just not the right layout, it's not the perfect spot within the building. But are we short on space at this point? We are, relative to how our shows and rentiers are wanting to grow. To your first(1St) question though, the Civic Center Board of Managers have renegotiated the lease agreement with the Museum of Art that was satisfactory to both the Art Museum and to the Century Center,which EXCELLENCE j ACCOUNTABILITY ! INNOVATION INCLUSION j EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 (574.235.9173 I T U 574.235.5567 www.southbendin.gov 9 •CITY OF SOUTH BEND I OFFICE OF THE CLERK is not a rolling three(3)year lease agreement. Everyone's happy with that. At this point in time we do not have any interest in losing them as a primary tenant and partner in the Century Center. Mr. Jarnecke continued, These two (2) last slides for you (referencing the presentation). On the parking side, so Fund #601, which is on page twenty-one (21) of the packet before you. $4.5 million worth of improvements in 2019, so we were in need of some repairs. A majority of that went into the Main & Colfax Garage with $1 million being invested in that garage. More than $200,000 in both the Wayne Street and the Layton Garage later this year. Occupancy within the Layton Garage remains very strong at about one-hundred eight percent(108%) capacity,meaning Colfax is around one-hundred four percent(104%), one-hundred five percent(105%) of capacity. Wayne Street is lagging behind but I think we'll catch up with some of the businesses going in that direction at around seventy-five percent (75%) of capacity. Because of that, we do anticipate revenues continuing to grow year over year without a rate increase. Later this year we'll be bringing a strategy to you relative to parking operations within the City of South Bend going forward. Mr. Jarnecke went on, You'll also notice that expenses are anticipated and we're asking to be budgeted at a number dramatically less because we're not going to infuse as much capital into the garage in terms of the repairs because we're able to make a significant leap forward this year and we don't want to have as many projects to do next year. That brings us to profit. $175,000 roughly in terms of the anticipated part of the budget and we remain in a very strong cash position within the garage operation itself. I'm happy to answer any questions. Councilmember Scott stated, The parking garage operations, you guys note the parking garage operations are under outside contract with DTSB. Mr. Jarnecke answered, Correct. DTSB and then an organization called Block by Block that services and maintains the garages. Councilmember Scott asked, It's not Block by Block directly with the City? Mr. Jarnecke replied, Block by Block is contracted directly through Venues, Parks & Arts in the City. Correct. Councilmember Scott followed up, And then where's DTSB in that then? Mr. Jarnecke replied, DTSB is also contracted by the City. So, DTSB has the management of the garages. They employ the staff person to which that individual handles all the monthly renews and all the monthly parkers. Then Block by Block is the group that maintains the garage in terms of the aesthetics. It's the group you call if you need an escort to the garage. He continued,And then lastly in terms of the Venues topics, I believe in front of you is discussion. We've touched on this already relative to a number of positions within the Morris side of it. So, there is one (1) promotion of an individual. I'm not excited to share but we had three (3) of the individuals within the City that were three(3)of the lowest paid individuals of all City employees. Part of the correction that you'll see is not only a promotion that's well deserved,but the individual that's coming from the Palais side to the Morris side,they'll be able to use that individual's degree that they have to better herself as we go as well. Then salary adjustments for our two(2)custodian positions that we have as well. Those salaries would bump up to $30,000 compared to where they EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 10 •CITY OF SOUTH BEND OFFICE OF THE CLERK are right now around$24,000.Those are the two(2) adjustment or three(3) adjustments that we're proposing relative to the staffing side of it. I touched on capital projects at length so I'll not go into any additional detail there.And parking,I mentioned that as well. So later this year as we formulate and Council Members discuss line of questioning relative to the operation the agreement with Block by Block expires December 31, 2020., we're exploring the ideas of different operators in new technology and improving the overall experience along with pricing strategy associated with the garages then going forward. Later this year we'll have that plan available for the Council. Mr. Perri stated, Good evening, again. As we transition, I wanted to make sure to recognize the VPA team leadership team that's here. They don't get an opportunity to sit in front of the Council very often. Mr. Perri then introduced staff members present in the audience. He stated, A special thanks to them for putting all of this together and the work that goes behind implementing it all. He continued,As you move into Fund#201, we'll focus heavily on the numbers. This is found on page twenty-three(23) of your packet if you're following along.You'll see that Fund#201 appears twice in your packet back to back on page twenty-three (23) and twenty-four(24). I would highly recommend looking at page twenty-three (23). If you recall last year we combined Funds #201, #203 and #405. Page twenty-three (23) illustrates the historical combination of the three (3) accounts. That would be the most accurate picture to look at. He went on, This year, or proposed in 2020, I would call this a maintenance budget. We've had quite a few years of capital investments that will have been in front of you bringing quite a few things in the combination of different funds and even the consolidation of VPA. Quite frankly this budget's pretty simple compared to the ones I've brought to you the past three(3)or four(4)times. Some of the major things happening on the revenue side of things, we are seeing a decrease in property taxes that's projected to be about $340,000 less next year. As we're all aware, property tax caps are taking a full impact and so that's how we're going to feel it on the parks side of things. We'll see that grants are down about $4.75 million. Those are just project grants that we are rounding out. Primarily that's made up of the Regional Cities money that's being spent out at Howard Park. Other project-related type things, again small grant money that's been coming in that we're spending out that we just won't see again. Those are one (1) time kind of expenses that are off the table. Including moving some things off our books. I'll talk about it when we look at some historical things like West Side Main Streets that were historically on our books that are going to live outside of Fund#201. He continued,Then we also on the revenue side of things are looking to see an increase.Requesting Council approval of an increase of$400,000 in the General Funds support. I wanted to illustrate that footnote there though. Previous five(5)years we were averaging about$1.1 million dollars in General Fund support. Due to various reasons and some of the healthy cash reserves we had, we were able to take that down to about $400,000 here in 2019. We want to move that back up to about$800,000 just because you see our big dip in property taxes, so to normalize what's going on there.Nonetheless,it's still a decrease reliance on the General Fund of what we've historically been seeing if we normalize it. The other side of the revenue includes the charges for services. We've had a perineal error show up on our books. We had some big Department of Community Investment service maintenance agreements which showed up year after year and it's not something that we ever formalized or had on our books. So,Howard Park,we're going to see some increase there. Skating is scheduled to open up at the end of this year and room rentals as well as rent on the café space that we see coming in,so we'll see some nice revenue there. Golf is projected EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION i EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend.Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 vwnw.southbendin.gov 11 SCITY OF SOUTH BEND OFFICE OF THE CLERK to hit that final break-even point next year. So again, seeing some increased revenue on the golf side of things. Also, that will be due to some of the cross utilization of the Erskine Clubhouse for private rentals and events as well. He went on, The program optimization, quite often we look at our portfolio programing to see where there's redundancy. We want to make sure we're filling all the gaps and places where we see decreasing participation, industry trends or otherwise we look at eliminating some programs. So, things like the Kid's World day camp or flag football. We won't see those revenues, but we also don't see those expenses on the expense side of things. Then, we are just trying to make the budget a better tool to manage by. It seems like year after year,now that I've gotten into this a few times, we've historically inflated our revenues to some degree. I want to normalize that and make sure it's actually a tool that we can manage by itself. All in all, that's where you're seeing the charges for services go down. But nonetheless, the footnote there is at the end of the day it's significantly higher than what we were seeing historically. That's the revenue side of things. He continued, On the expense side of things we're still on that Fund #201, #203, and #405 combination. Personnel, we are anticipating just like every City department the two percent (2%) salary increases. Like I mentioned on the revenue side, we tended to over budget, particularly on our part-time labor. We took a hard look at that. Every year we were ending up with extra money in that fund with our part-time and seasonal folks. We had some minor reorganizations as we had somebody move out of the Experience Division, we decided instead of hiring a full-time position back,we can do it with some part-time or contract labor. We're trying to be smart about that as we see contrition otherwise. We see some small savings there. He went on, We will bring back in the Howard Park staff. We had a few years of not having them on board but these are primarily part-time or these are all part-time and seasonal folks. These are rink guards and landscapers and those types of people. Health insurance benefits are going up. You're probably seeing that across the board in every department. At the end of the day though it all comes out to about a two percent (2%) growth. That's right about where we want to be. This does include one (1) personnel change request. This would take our project manager and move him into the manager of public construction. This position already exists in the salary limits. I believe that there's one(1) or two (2) other folks in the City that have this title. His work is really in line with what they do. His quality and quantity of effort, so we want to recognize that. He's been with us for a couple of years now and we'd like to put him up to peers in other departments. That does come out to about a $13,000 increase in the salary ordinance for his position. We only anticipate awarding approximately half(1/2)of that in year one(1). I wanted to make sure I noted that. He continued, The other side of expenses becomes the supplies and services and charges. Across all divisions, we're just tightening our belt and trying to absorb some of the property tax decrease. We looked at historical spending and where we could cut some things and just cross-utilize some of the things that already exist in the department. So, we're going to be doing that there. Utilities are going up. As green as we're trying to be, that needs to be a challenge every year. But a large part of that is bringing Howard Park back online. We got a new community center and ice-skating rink which does consume, even though we're going to be, I think, certainly LEAD gold certified, I just found out the other day. So,we're pushing that. It's still going to be a costly building to have online. Debt service increases about $79,000. That's primarily golf carts and Boomer, as planned. We're seeing a decrease on My SB Parks & Trails projects. Again, as we're winding those down EXCELLENCE ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend.Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 12 CITY OF SOUTH BEND OFFICE OF THE CLERK we won't see those show up in our expense budget. They're small re-categorizations happening. We see things bouncing around a little bit and have questions there that are particular. I can certainly answer those but that's net zero (0), which might have shown up in one(1) line last year and in a different line this year. Then program expenses, I mentioned that as we look at optimizing our portfolio we saw some revenue decrease. We're seeing even more decrease on the expenses. He went on,Allocations are going down this year. That's directed to our department. At the end of the day about $1.4 million dollars net reduction in expenses but if you normalize it, take all the one (1)-time project type things, My SB Parks & Trails otherwise, that's close to a $300,000 reduction in the expenses. Just to put that into historical context, that's the next slide there (referencing the presentation), slide thirteen (13), I think it's important to look at where we came from and see how the trends are shaping up. Expenses, salaries and wages have since normalized combined, so this is Fund #203, #405 and #201 combined and normalized since 2015, taken out all the one(1)-time projects, salaries and wages increased about two percent(2%) a year. Supplies have grown about two percent (2%) a year. Allocations have gone up as we all know there was a change in the City's restructuring of how IT costs were otherwise allocated out to departments. These were charges that were already in the City budget, they just got put on the departments. Services and charges have increased about a percent and a half(1.5%). The interesting point about all of this though is you're seeing very modest increases year over year. But this includes the addition of quite a few things through the years. Some of the things that I said are no longer in our budget that we've figured out how to move those out, the West Side Main Streets project and service maintenance agreements. We've done centralized mowing, added in Smart Streets and caring for Boland Trail, and managing all of this My SB Parks & Trails initiative. We expanded things like the Charles Black Center and added new programs like the soon to be ice skating. All of our standards as we started with our impact drivers, our standards have been increasing very stringently. We see some savings through all these efficiencies that we've talked about. Jeff mentioned some of them. And then we've grown our youth scholarship fund. It's pretty interesting to see on the expense side of things very modest increases with quite a bit of returns to the community. Y He continued, On the revenue side of things unfortunately, like I said, this year with property tax caps we're sliding a little bit backwards. But by and large we've been growing about five percent (5%) a year. Charges for services, that revenue side has remained relatively flat on what we see that growth projection coming online here with Howard Park, the golf, some of the things I've mentioned earlier. Donations to our programs and events primarily through sponsorships have been averaging about $125,000 a year. That's money that didn't used to be in the system. The General Fund support, whether it be through the form of pilot or more recently COIT, averaged about$1.1 million a year. I said that earlier. Reduced to $400,000 and put it back up to $820,000. Project grants and donations, we're really proud of this part, that we've been able to bring in $12 million dollars through various grants and partnerships over the past five(5) years. Committee Chair White opened the floor for questions from Council Members. Councilmember Scott stated, The DCI estimate error,that always drives me nuts. Can you explain that? Go into more detail on this? Mr. Perri replied, It's called a service maintenance agreement that we had. It's supposed to be a transfer of funds. It was basically double budgeted in both of our accounts. It was an expense to EXCELLENCE j ACCOUNTABILITY 1 INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 13 CITY OF SOUTH BEND OFFICE OF THE CLERK take care of vacant properties that DCI owned. They're paying for that directly out of their accounts. We had previously put it in as a revenue item. But it never realized, so we wanted to get it out of there. Councilmember Scott stated, Okay. The other question, I talked a little bit about DTSB and West Side Main Streets, what do you mean by leaked$157,000, $400,000 annually? Mr. Perri replied, As we worked on combining Venues Parks & Arts over the past few years, we took on the management of DTSB,West Side Main Streets,and some of those things.Historically, those contracts had gone through the Redevelopment Commission and were paid for by DCI. For the most part that has remained true but various pieces and parts came over and got burdened on Fund#201.We're correcting that in this year's budget to make sure that the Redevelopment funding is taking care of those programs. So, you won't see those show up in our budget. You'll see those show up elsewhere. Councilmember Scott stated, Okay. That is a concern of mine because I didn't know. I've been on DTSB forever and it was always through DCI that the money was allocated from the City through DCI to there. I understand the parks, the red shirt part a little bit,but to me it's expanding way too much into parks. I look at DTSB as the business side first(1st)and then the funds side second(2n1), you know? So that tie back to DCI, I think, is really important. All right. Thank you. When will that happen? Mr. Perri answered, That will be in the 2020 budget. Committee Chair White stated, I do have some questions. Mr. Perri, as you look at some of the recreational centers, there are neighborhoods that are not as wealthy as others and are somewhat challenged. How do you view those neighborhood centers in regard to looking at them to generate revenues that might not be there? But also, as I look at the Charles Black Center from an operational perspective, that Center has been expanded but the personnel to maintain the Center inside and outside is not there. I notice that you have mentioned that you're proposing a part-time person for Howard Park. I know that there are a lot of questions but I want you to talk a little bit about the philosophy that you may have in regards to these centers that are not really the same. Mr. Perri stated, Absolutely. Our community centers, we really look at those as service first (1St) I think I've talked to the Council about our cost recovery pyramid before. This idea is that things like golf or concessions are supposed to make revenue and bring money back into the community. Things like mentoring programs or youth athletic leagues that we sponsor like the VPA Youth Basketball or otherwise, sometimes we'll have small participation fees but the cost to participate is significantly less than we'll ever be able to recover because we want to ensure participation remains high. Frankly,money shouldn't be a barrier to entry for any of our programs. The bulk of our programs at the centers are free. Very, very few programs cost money to participate. If you look at our recreation budget and you start to divide it out, more than fifty percent (50%) of our programing budget goes to the combination of Martin Luther King Center and the Charles Black Community Center. So that's a point of pride for us and one(1)that we don't want to throttle back on. When it comes to caring for the facilities and otherwise, we're trying to always optimize that as best as possible. My office doesn't get cleaned but once a week. We all take out our own trash and otherwise. Our programing staff talked about our mission statement and as they went through EXCELLENCE ACCOUNTABILITY INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 227W Jefferson Bvld South Bend,Indiana46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 14 CITY OF SOUTH BEND OFFICE OF THE CLERK the Drucker Institute, one (1) of the things is called Caring for our Shared Spaces. That's one (1) of the tenets that they have. Making sure it's widely accessible and available, and clean. Committee Chair White followed up, So then the expectation would be that individuals are working within our facilities that they would have the expectation to ensure that the centers in which they work in would be clean? Mr. Perri responded, Each center staff does have one (1) custodian assigned to it. Actually, that was just a recent change. They're reporting now directly to the center staff. Then our facilities and grounds team will be responsible for the major projects and repairs as well as the exterior landscaping, snowplowing, cutting grass and otherwise. Just like we treat every other park and facility. Committee Chair White asked, But as we move forward,as homes are being increased and looking at Howard Park, just the size of that park alone and then from the operating perspective as we move forward, what would that look like in order to ensure that the facility and the programs and the services are maintained with the staff that you might have? I'm looking at the operating budget and there are some gaps there. Mr. Perri stated,We're not adding a lot.With Howard Park,we didn't reduce a lot of the staff when we closed it down. We had a Director of the Howard Park Community Center. At one(1)point in time you may remember Rose Kaufman. Committee Chair White replied,Yes. Mr. Perri continued, Rose is still there and she's going to come back on as the director of that facility. She also has a part-time employee that helps out with some of the programing. We didn't eliminate those positions over the past couple of years. Same thing when we close Charles Black Center. I promised the Council that we wouldn't eliminate positions.We found ways to keep people employed throughout these construction projects and otherwise.You're seeing things like a modest increase in staffing for Howard Park. That's primarily part-time positions. Most of that is the ice- skating rink guards or people that will take money and give you your ice skates. That's where most of it is. We're trying to do everything as lean as we can. That's really important to us. Committee Chair White followed up, Yeah. I'm looking at projections in terms of revenues and there are some projections but also you are looking at a proposed increase of$800,000 for support. That's coming out of COIT funds. I'm on page seven (7). Reduce to $400,000 2019 but you're proposing to bring that up to $800,000 for 2020. Mr. Perri replied, Historically, that had covered things like the allocations and otherwise. I had mentioned it was about$1.1 million dollars. Last year we had a pretty healthy cash reserve balance. We were able to take that down to $400,000. But given the property tax reductions that we're facing this year, we would have to face some really difficult decisions if weren't able to get some additional General Fund support. Not quite to the historic levels of the$1.1 million dollars but up to the $800,000 will help us be able to ensure we can do all of our programming and care for all of our things to our existing standards. EXCELLENCE � ACCOUNTABILITY INNOVATION j INCLUSIONI EMPOWERMENT 455 CountyCity Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TfD 574.235.5567 www.southbendin.gov 15 •CITY OF SOUTH BEND OFFICE OF THE CLERK Committee Chair White stated,Okay. Based on everything that is coming out of Parks and Venues and all the different programs and looking at where we're at from a financial perspective, are you confident that you will be able to maintain or even increase the programs and the staff within the operating budget and not run into any difficulties? Mr. Perri replied, I feel pretty good about it. I'll talk on our cash balance towards the end but we'll continue to work on our business modeling into the future. I think particularly by having General Fund support at these levels, it's a sustainable budget. Committee Chair White stated,Okay. And do you see that General Fund support being maintained from say 2020 as you mentioned,to 2021? Because I know all of us are being asked to live within our budgets. Mr. Perri stated, Yes. Committee Chair White followed up, I just want to get a sense, as we move to 2020, 2021, 2022 and thereafter. Mr. Perri replied, Yeah. I'll continue to work with the finance team on that and of course Council. That would be the hope. That more or less offsets some of the allocations. That's why it's a little bit interesting when you talk about living outside the General Fund. We're our own taxing unit, so having that support when things like allocations get transitioned over to our budget bringing some additional revenue to help offset, that is very helpful and appreciated. We're grateful that the finance team and the Mayor's Office supports that decision. Councilmember McBride asked, If I understand you correctly, there's no cost associated for the Charles Martin Center and the Charles Black Center? I mean Martin Luther King's program? Mr. Perri replied, With the Charles Black Center and the Martin Luther King Center, some things have costs. We can get you a breakdown of the costs of every single program. But I would say, I don't want to misspeak but a percentage of programs are no cost to the centers, yes. I'm speaking off the cuff here, so we'll get you a written schedule. Councilmember McBride followed up, Have the numbers gone down on participation? Mr. Perri replied, Participation, no. As part of our follow up we'll make sure we'll get you participation levels and the fee structures at the centers. But you're going to see a lot of zeros in the fee structure. Councilmember Teshka asked, As part of that too,just to dovetail on that, in that follow up could you include how manyof those that are fee'd are scholarshipped? I think that's a keypiece of that. pp Mr. Perri replied, Absolutely. Councilmember McBride asked, Also, for clarity, there was not any reduction in staffing with the renovation? Mr. Perri replied, No. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 16 CITY OF SOUTH BEND OFFICE OF THE CLERK Councilmember McBride asked, In 2020,what is the total overall debt? When you're talking about expenses versus revenues, was there a net? Mr. Perri replied, We actually showa budget bd et that would be in the black of$129,000. g Councilmember McBride followed up, Okay. I don't want to take up all the time, but I am interested in more information about the negative $1.1 million dollars for My SB Parks & Trails, but I can defer that and ask later. Mr. Perri replied, We'll make sure that we get that written down. � Committeemember Voorde asked, Can you comment at all on Fredrickson Park? You may be partnering with the Scouts over there to try to do something. The Scouts may be in trouble. Mr. Perri replied, Fredrickson's an interestingThe Cit has invested quite a bit of money Y Y into it. Those of you that have been on Council for a while understand. It's a former landfill site so the City about, I want to say eight (8) years ago now, invested well over $1 million in a clay cap and a methane burning system. We made it into, basically, a prairie. We have some trails through it but other than that it's a prettypassivepark. Not a lotyou can do with the claycaplimitations. Can't really install footers and playgrounds and pavilions and some of those things.The Boy Scouts are obviously a huge stakeholder in that property. They're backdoor butts right up to the park so we did sign an MOU through the Park Board making it what they call a STEM park so that they would put together Scouting projects,Eagle Scout projects,and otherwise,and put them on display for the community to engage with. They did an Eagle Scout project a few years ago that involved an overlook on the retention pond that's back there. They help out with the mulching,the paths and otherwise. But I think there' are some creative things we could still do there. It just hasn't been in the immediate plan. I think we have something like thirty (30) odd project sites happening right now. Quite a bit, but it's not all of them. In Fredrickson, we've got a nice willing partner that has some ideas. We continue to be vetted through the neighborhood and we look forward to seeing what comes from it. Committeemember Voorde followed up, I think Fred Ferlic is working on it. Mr. Perri replied, Absolutely. Dr. Ferlic, Joe Grabill, and Judge Gotsch. A lot of familiar names are on that Boy Scout board. You do have some good community engagement there. Councilmember Scott stated, Grass cutting. Something I forgot to talk about today, I'd like to sit down with you and maybe John and talk about how we can expand the youth program for grass cutting. Again,this year, of course Council gets tons of calls on grass lots and I think there's more we can do to employ our youth. I know you've talked to a few individuals, and I know John has, but I'd like to sit down and figure out what we could do to increase those numbers. More than double that. Figure that out. Mr. Perri replied,Absolutely. We have a lot of grass cutting calls that come to us because not only are we in charge of parks but we're also in charge of all the redevelopment properties, and Code mowing. So, we have quite a bit of resources going into grass. As a matter of fact, we did an exercise recently. Grass cutting alone when you look at our budget, I mean it's north of a half a million dollars in the grass cutting. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 17 CITY OF SOUTH BEND OFFICE OF THE CLERK Councilmember Scott followed up, Right. It doesn't seem like we're getting ahead of it either. That's perception more than anything but we know we have issues there.My thing is for everybody else, there's a nonprofit organization in St. Louis called Operation Brightside where kids run around in orange T-shirts and they're employed all summer. Hundreds of them. To do nothing but picking up trash, cut grass. That's why I brought up the youth program that you guys embrace, which is really good. But I think what we got to do is expand on that. We really want to push for that. Dan Parker, I know you're taking notes. It's something that I really want to look at because not only can we benefit the City but our youth too. Summer jobs. Mr. Perri replied, I appreciate you mentioning that. I had a note actually when I was talking about personnel that I totally skipped over. It's on the slides but this budget does include full funding again plus a little bit more for the mentor mowing program. We do want to expand it. We also, I think I mentioned last time we were together,have a new program that is a partnership with Beacon as it came out of My Brother's Keepers. It is a youth leadership academy. Right now, college students have been trained. I got to spend time with them a few weeks ago out at the Martin Luther King Center. A group of a dozen young men and a dozen young ladies are getting trained in leadership skills.Next year we hope to be able to employ some of them in various roles throughout the department. We are including money for a partnership with the Juvenile Justice Center to employ high potential at-risk youth next year. We've got four (4) positions slated for that as well as a burgeoning partnership with the Drucker Institute to identify high potential adults who are economically at-risk. So, that's a neat pilot program we're working on. Those are all interesting things. We think about every single one (1) of our positions as more than just a job because they could change lives. Thanks for giving me a chance to highlight that. There is more to come there. Committee Chair White asked, Aaron could you just refresh my mind on the graffiti program? Is that coming out of Parks? Mr. Perri stated, It is. Committee Chair White followed up, How is that going, and what dollar amount has been identified to support graffiti? Has that declined or are we experiencing an increase? Mr. Perri replied, I can get you a fuller answer on that. I'll ask John and he'll help me do that. We'll get you a response on where the numbers are. Committee Chair White followed up, Okay, but it's still it's under Parks,right? Mr. Perri replied, It is still under Parks.The code and graffiti program costs about$280,000 a year, so the work that we do with Code and Code cleanups, Code lots and graffiti. That is still in the budget. It's an important part of us. We have the standard of removing graffiti within twenty-four (24)hours of it being reported. That's the best way to combat that. We also work very closely with the Police Department. Sometimes these tags can be gang related or crime related, so we keep a good inventory. It's more than just wiping off spray paint. There's a lot to it. Committee Chair White stated, Okay.And you've been looking at some of the youth employment. It would be somewhat exciting to see, as we look at our centers, to see how we could support employment of those individuals that live within the neighborhoods that will be impacted at a different level, too, so I'll share with you some ideas that I have in that regard as well. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 18 •CITY OF SOUTH BEND OFFICE OF THE CLERK Mr. Perri replied, Thank you. Mr. Perri continued, I have two (2)more slides that I'll go through (referencing the presentation). These won't probably invoke a lot of questions because there are very few changes. Here the axillary funds, Fund #751. It's page thirty-two (32) and thirty-three (33). This was a 2015 Park Bond out at the Charles Black Center. That was the last project we had. That's all closed out so you won't see any expenses there other than paying the debt service which is Fund #757. That's about $380,000 a year paid from EDIT, Economic Development Income Taxes. The 2017 Park Bond,no changes there either. We're paying about$1 million annually on that debt service. That's coming from a special property tax levy that normally funded the College Football Hall of Fame. Coveleski,it is still officially Coveleski Stadium but now Four Winds Field at Coveleski Stadium, that's how it shows up, and that's page twenty-seven (27) of your packet. This is where we record the revenues from the ticket share agreement. We spend approximately all of that every year on various capital projects in and around the building. That's what that fund is. Fund#730 is the City Cemetery. That's page thirty (30) of your packet. We're on year two (2) of three (3) of major upgrades out there. If you haven't been there lately there are new paths, the redevelopment of the entryway and all the limestone headstone repairs are really starting to improve that property. He went on,Then finally Fund#731 is the Bowman Cemetery. You'll notice a pretty healthy cash balance. That's a trust account that we can't spend anywhere other than Bowman Cemetery. We currently don't really have any needs out there. That's over there on Miami. Currently they don't have any needs out there so that fund will continue to accrue until if and when we have some needs in and around the cemetery. It will be well taken care of. Then the final two (2) accounts you'll see there are Funds#203 and#405. They're included for historical accuracy. There's nothing in them. There wasn't in 2019. There won't be any going forward. Again, those are consolidated into that page twenty-three(23) that I mentioned earlier. He continued, Finally, we were asked to just discuss any major capital projects. We're embarking on a two (2) year plan to work on all of the neighborhood athletic courts. These are basketball courts, tennis courts, softball fields, things like that, that you see are in dire need of upgrades. So, we'll embark on that next year to really finish the My SB Parks&Trails project. So,this has taken a little bit longer for some of these to get out of the gate than we might have hoped for various reasons,but that's the list of ones that will be finished in 2020. The only remaining project will be Seitz Park. That's lagging a little bit behind because of the Notre Dame hydroelectric project. But we're finally breaking ground on that this coming Monday. If you haven't seen an invite that should be showing up in your inboxes pretty quick. Howard Park I had mentioned earlier,that's scheduled to wrap up by the end of this year. If you'll notice in our Fund #201, we do have a very, very healthy cash balance that far exceeds our reserve requirement.That's because we haven't allocated all of the Howard Park spending. You're going to see that in quarter three(3) appropriations. Just reminding you now. We'll talk about it in quarter three (3), but there's about $2.9 million of that that's going to be appropriated in quarter three(3)to finish out Howard Park.Then Jeff had already touched on planning for the future venues. I don't see significant cash coming out.We didn't budget that here in 2020,but we do want to make sure that continues to get footnoted,the future of Century Center and the major initiatives around the next one-hundred (100) years. Councilmember McBride asked, Where are we with Randolph? EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601,p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 19 SCITY OF SOUTH BEND OFFICE OF THE CLERK Mr. Perri replied, Randolph Park got a brand-new playground just installed. It looks great if you haven't been by there. The sidewalks are in and we did get the street vacated, Sampson Street.That will terminate right into Randolph.We're working on plans with the Streets Department and Public Works to figure out exactly how drainage is going to work in and around the park to make that a safe den in there. But we hope to be able to conjoin the two (2) parts of Randolph so we can graduate it from a mini park to a real park. Councilmember Scott stated, Brownfield Park. So, Brownfield Park, the basketball court's been great. That really brought new people in. Parking has been great. That was done around the time of the roundabout. The rest of the time that park was used for some football and soccer every now and then. Otherwise that park was empty. Few people on the swings, but the new playground equipment and that zip line have people lined up. That is the coolest thing ever. I drive by there all the time and you just get a chuckle because there's kids and there's adults going down that zip line. Mr. Perri replied, I've been on it. Councilmember Scott followed up, Yeah. I haven't yet but I will. Mr. Perri replied, You should try it. Councilmember Scott continued, So, it's really just those few amenities that you added that really brought people out to that park. But the one(1)big thing that really helped out was the bench there. Really facing the zip line that parents can come down there and sit. That was the big thing that was missing out of that park. We just had a neighborhood meeting, a little get together and they said, "That's the beauty of it. Parents can come down, sit down while their kids are doing whatever." It's sitting out in the field but it's not really in the shade but there's a place for them to sit down. You wouldn't believe, there are more people in this park already since you guys opened that than I've seen in a full year's time before. So, thank you for doing that. Mr. Perri replied, I certainly appreciate the comment. It's interesting. Of the millions of dollars of improvements we're doing in the neighborhood parks, these are the ones that are getting the most kudos back on. You may go visit the Charles Black Center on occasion or Howard Park on occasion, but the neighborhood parks are where you go daily. So, those improvements, I think when you add them all up between the restrooms, the athletic courts that we have planned and the playgrounds, I think it's twenty-six(26)different neighborhood parks that saw some pretty special upgrades. Councilmember Scott followed up, It'd be great to have a restroom there. Mr. Perri replied, Yeah. Councilmember Teshka stated, We'll continue dialog about somehow getting some park space the fifth (5th), but I would just like to thank you. I think your presentation was fantastic and you ran with what we asked for last year.That was to come at us with some numbers and you did a fantastic job. So, thank you and your team for putting this together because it's a super informative presentation. I really like the way that you normalized some of those figures, as well. That helps us get a better view of that, so thank you for doing that. EXCELLENCE I ACCOUNTABILITY I INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 (574.235.9173 TTD 574.235.5567 www.southbendin.gov 20 CITY OFSOUTH BEND OFFICE OF THE CLERK Committeemember Voorde asked, Is there a new river lighting project of some kind? Mr. Perri replied, No, not immediately. Although, it's always in the back of my mind. You may recall we did hire a firm probably about a year ago to come in and look at how the River Lights Trail could evolve. So, to expand on the success of that we have there and maybe go between Colfax and Howard Park, we could make it a loop system. We've got some concepts there. We wrote a grant to the National Endowment for the Arts and got some seed money to explore those concepts. But as you can see, we're pretty busy with all these other projects and doing some final fundraising around some of these other things, so it's in here somewhere John, but not a major priority right now. Committee Chair White stated, Okay. Well, we thank you for your presentation and for the staff with all of the work that you have done and they have done and continue to do, on behalf of our citizens and the City at large. Committee Chair White then opened the floor to members of the public. Sue Kesim, 4022 Kennedy Drive, stated, I'd like to know the study down in reserves for the last five(5) years by year. I'd like to know how much of the multi-million dollar bond funds are gone versus how many years we have to pay them off. I'd like to know about park police. There seems to be a lot of crime in the parks. I have friends at Keller Park. They can't use the park after dark. So, I think we need to have that addressed and I don't know what funding there is for that. Security for the parking garages,if there's funding for that. I'd like to see a map of the neighborhoods outside the downtown. So, what funding is left for outside the downtown? I think that's important. I'm concerned that we aren't using a pay as you go type strategy. I wonder about the wisdom of taking out a bond for a giraffe and the party room when you've got twenty percent (20%) of the sewers done. The roads are on the one-hundred (100) year schedule. The water isn't up-to-date, and we have public safety needs. I wonder about your priorities on the$650,000 boom box. It wasn't built in Elkhart and it didn't even boost our local economy. That's over a half million dollars. I'm concerned about spending over$200,000 on a beam for a 1,000 pound chandelier for Phantom of the Opera. That probably damaged the ceiling, so now there's more expense on that. Arborist's licenses. I think it'd be great to make them take a class on how to properly do landscaping. I see a lot of damage to trees, which as a master gardener bothers me. I think it is part of the arborist's license we could charge more and then give them an annual class. Most of all I'd like the Council to use the needs versus wants. As you're doing this, put an N next to needs, a W next to wants. We've got huge deficits so if it's not a need,put a line through that want because that hasn't seemed to happen very much. So,just common sense.What people do at home. Is it a need? Is this a want? I don't think a giraffe and a party room is a need. We've got plenty of roads that need to be done. Eighty percent(80%)of the sewers aren't done. So, I think your priorities need to just be really cut and dry. Councilmember McBride asked, Ma'am, where is a giraffe and a party room? Where's that? Ms. Kesim stated, That was at the zoo. You guys approved that. Committee Chair White stated,Okay.Thank you. I do know that the question in regard to the beam at the Morris Performing Arts, that was a question that was asked last year. I'm going to ask Aaron EXCELLENCE ACCOUNTABILITY INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 I[1)574.235.5567 www.southbendin.gov 21 •CITY OF SOUTH BEND OFFICE OF THE CLERK to respond to it because we actually, if I'm not mistaken, we were reimbursed for that. But I will make sure. Council President Time Scott clarified, We were. Committee Chair White stated, But I want to make sure. But we have all your questions and we thank you for sharing those. Some of which we'll respond to. Others we will have to put in writing for you. Isaac Hunt, 138 East Broadway, stated, I'm not here representing my organization, I'm just here as a citizen. I have a couple questions that I'm hoping Mr. Perri can answer. As far as the Charles Black and the King Center who's cutting the grass? There are times where I've gone out to the O'Brien Center and the grass is immaculate. And you go over to the King Center and it hasn't been cut in a week. I know that, and this is my understanding. It could not be accurate, and I would like to get answers on this. As far as maintenance personnel, I know at the Charles Black and the King Centers are bigger but you have more maintenance personnel at the O'Brien Center than you do at the two (2) other facilities. I want to know what the reasoning is behind that. In addition, a lot of people in the community are saying that the summer programs are being cut for people from thirty (30) to twenty (20) to ten (10) next year. I'm really concerned about that. What can be done? Because you know I'm on this thing about that boombox. We just spent$1.2 million dollars on the boombox. We need to be able to put our kids to work and give them an opportunity to learn the soft skills. Punching in on time, doing the things that need to be done. I took a picture with the boombox the other day because it's a joke to me but there are some disparities that I really want to see some answers on. The weight equipment at the King Center is used and it was given from the O'Brien Center to the King Center. At the O'Brien, they got new equipment. So why doesn't the King Center get new equipment? Then the old equipment given to the O'Brien Center. Why is it always in the reverse? These are some of the questions that are asked in the community and it's about being intentional. I like hearing what I hear about the Morris and Civic and the things going on in the Century Center,like the zip line. There's a lot of good things going on,but I'm asking for more intentionality when it comes to these centers in our neighborhoods. Thank you. Mark Piasecki, 101 N. Conestoga Lane, stated, I have a couple questions. I was wondering if Mr. Perri has budgeted for the cost of liability for Howard Park? Specifically, the ice ribbon and the play area. I bring that up because I noticed the City of Spokane opened up ice ribbon in December of 2017. I think first(1st)day they had fifty-seven(57)injuries and one(1)death on that ice ribbon. It had some elevation changes like they have here at Howard Park. In Chicago, they've had many injuries in their play area near the ice ribbon. So many injuries that law firms had I think online just told people to join the lawsuit against the City. It seems to be a liability magnet.The ice ribbon in the play areas, so I think we ought to think about how we're going to protect the City and taxpayers against an onslaught of lawsuits as a result of that. It is ice skating up and down and a change in elevation. To me, it sounds like a very risky thing to do, unless you're a very good ice skater. So,I think we should at least review what the costs will be to the City for this park. Secondly in June Mr. Perri said at a Park Board meeting that the Park space is at a$700,000 deficit for 2020, but I couldn't reconcile that with the numbers that were presented. I haven't seen the presentation. It was hard for me to read some of the numbers. I couldn't reconcile that the $700,000 deficit he mentioned in June at the Park Board meeting with what he said today. So, I agree, I think that it is a little too late to talk about the expenses we're lavishing on parks. It's a little too late with the bond issue. The money's spent. The bonds have been issued and the money's there. I think the only way EXCELLENCE ACCOUNTABILITY I INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 22 CITY OF SOUTH BEND I OFFICE OF THE CLERK is to make sure that money is wisely and efficiently spent, and programs are evaluated to see whether or not they're effective. I hope in the long run that the cost of these new parks to maintain them is not going to be exorbitant. I hope we're not going to regret the projects we've undertaken. Anyway, those are my thoughts. Thank you. Committee Chair White gave the floor back to the presenters. Mr.Perri replied,Yeah.We'll certainly do a good job on consolidating these in a thorough response in writing. Just briefly, I mean we pride ourselves in the way we care for our facilities. John and his team spend an exorbitant amount of resources ensuring these places are maintained to the best degree possible. Can we always do better? Yes. Will we do better? Yes. And if there are things that need to be addressed, John's probably one (1) of the hardest working guys in the City. His team will take the call and they're on it immediately. I'm just going to spot through a couple of these. In terms of programs being cut, summer programs and things like that,that's not in the plans at all. The liability insurance, we just had our risk management team out there yesterday looking and inspecting Howard Park and the process. We're doing everything we can to make sure all standards are being met. I know the City itself is insured, but you can learn from other places and whatnot. Even putting up a swing is inherently risky. But the fact of matter is I think we followed all best practices and we're going to have a safe and enjoyable experience for our community. The $700,000 deficit I mentioned, those were the projections we had at the time for the reduction in property tax revenue.That has since been reevaluated and it's down to the$340,000 that I reported today. You asked me to address the chandelier issue. That was entirely reimbursed by Broadway Theater League. That was not paid for by tax dollars. That was paid for by that promoter. No indication at all that that had anything to do as structural. The pieces that fell were decorative, ninety-eight (98) year old decorative pieces. Nothing to do with the other. Plenty of other things to talk about in terms of how we prioritize projects and spending and how we're spending things down in terms of the capital spending and otherwise, happy to address those as they come. Committee Chair White stated, I want to also say that most of you are aware that this Council,we have and will continue to place high emphasis on the quality of life within our neighborhoods. So, as we look at all the presentations,that becomes our top priority of course. But,we also are looking at it from a financial perspective. As we continue with our budget hearings, we'll continue to look at those areas as well as to look at ensuring that we live within our means. Thank you so much for your presentation. Thank you department heads and staff for being here and the Council Members. With no further business,Committee Chair White adjourned the Personnel and Finance Committee meeting at 6:57 PM. Respec 1 submitted,, Kare White, Committee Chair EXCELLENCE I ACCOUNTABILITY INNOVATION INCLUSION 1 EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 23