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HomeMy WebLinkAbout07-16-03 Informal Meeting 'committee toort on tbt linformai Muting of tilt §outh Ventf Common Council Council President Karen L. White called the July 16, 2003 Informal Meeting of the South Bend Common Council to order at 4:00 p.m. In the Council's Informal Meeting Room. Persons in attendance included Council Members Varner,Kuspa, White and Kelly; City Controller Rick 011ett, Public Works Director Gary Gilot,and Council Attorney Kathleen Cekanski-Farrand. Council President White announced that this would be the last Informal Meeting held with the City Administration until October 2003, in light of the upcoming budget hearings. She noted that she met with Mayor Luecke last Friday and it was recommended that the City Controller provide an overview to the upcoming budget hearings. City Controller Rick 011ett stated that 2004 will be one of the most challenging years financially for the city. Revenue has decreased in several areas. For example, COIT and CEIT revenues are projected to be lower by 4%. Wheel tax proceeds are projected to be on the positive side, and gaming proceeds are to be on the positive side but right now the projections are too broad to be very specific. The wheel tax will bring in$ 1.6 million in revenue to assist MVH activities. Mr. 011ett noted that the cost of medical insurance continues to increase. In 2000, $4 million were spent; in 2001, $ 5.5 million were spent; in 2002, $ 6.1 million were spent; and for 2003 cost projections are at$ 7.5 with $ 9 million projected in 2004. Mr. 011ett stated that reserves covered the extra costs in calendar years 2001 and 2002; however this year General Fund dollars are being used. $ 5.1 million were budgeted for calendar year 2003 for medical insurance costs, however if expenses continue as they have for the 1st six(6) months$7.5 million will be this years cost. As a result, a charge has been given to all Department heads to generate savings from each of their operating budgets to cover such increased costs. Dr. Varner noted that some departments have bigger problems in this area than others, for example trash haulers. Mr. 011ett noted that Worker's Compensation would be involved, however the data is not showing any direct relationship in this area however there are trends. Council President White inquired into the responses received from the Department heads with regard to the directive to cut from their operating budget. Public Works Director Gary Gilot and Mr. 011ett noted that the response has been "tough", with the smaller departments being hit the hardest. They noted that there will be many tough choices made in the weeks ahead. Departments will have to be creative such as pulling resources, reviewing take home car policies, reviewing the number of cell phones, etc. Dr. Varner noted that the Police Department often talks of parity and the Fire Department often refers to parity. If the disparity is eliminated and if all employees are on the same health plans it may be more equitable across the board. Mr. 011ett noted that the premiums for the Teamsters have been raised but are not the same. The Council Attorney noted that to date the information requested at the last Personnel and Finance Committee meeting had not been received, namely the medical insurance comparison of several second class cities prepared by the Administration last year and the City Department comparison requested by Council Member Kirsits. Mr. 011ett noted that he would make sure that both documents are sent to the Council. Mr. 011ett stated that there are four(4)basic categories to the budget process: personnel, supplies, Informal Meeting of the South Bend Common Council July 16, 2003 Page 2 other services, and other uses. No increase will be permitted in the last two (2) categories, however they may go lower. Mr. 011ett noted that the Fire Department will have to reduce their budget by $ 759,000 and the Police Department will have to reduce their budget by approximately$ 1 million. Dr. Varner inquired whether the Fire Department could use its EMS funds, and was advised that they could. Dr. Varner requested that the Administration send a copy of the proposed reductions for each department to the Council. Mr. 011ett stated that he would send this information. Mr. 011ett noted that insurance plan design changes are being reviewed which will be behavior oriented. For example, raising the deductible for using the Emergency Room to $ 100 may bring about a behavior change in employees. Mr. 011ett noted that he has met with Honeywell officials and reviewed their policies with regard to wellness incentives, however noted that results are hard to track. He noted that the City continues to make advances in safety risk management practices and procedures. Council Member Kelly stressed the need to see the information on other second class cities on their medical insurance coverage. Mr. Gilot noted that department heads will be able to look at both their operating and their capital budgets for reductions. Attrition and reducing body counts by increased efficiencies in equipment are also being suggested. He noted that the pot hole machine is just one example. In response to a question from Dr. Varner, he noted that the city is currently involved in a pilot program using a trash vehicle with flippers and not a robot arm. Another area which will be looked at is the year end transfer ordinance for areas of possible cuts. Mr. 011ett noted that"one size will not fit all departments" when it comes to budget cuts. Service to the public cannot be compromised. Discussion then took place on the effectiveness of the data set forth in the performance based budget. It was noted that it is good for overall performance measures, but is not as effective as initially proposed. Council President White suggested that the detail pages to the budget by department be provided in a more timely manner so that they can be properly reviewed before a Department head comes to a hearing before the Personnel and Finance Committee. Mr. 011ett stated that he would see that the detail sheets are given to the Council as soon as they become available, along with the summary sheets of requested cuts by department so that the Council may review them. Dr. Varner inquired whether there may be a rush to spend current dollars giving the example of upgrading computers. Mr. 011ett stated that they will be enforcing the process. IT is to purchase under the state and the Administration will be there in an oversight capacity. He also noted that there is a process in place for purchasing motor vehicles which will be carefully monitored. Informal Meeting of the South Bend Common Council July 16, 2003 Page 3 Council President White thanked Mr. 011ett and Mr. Gilot for their information,and then adjourned the meeting at 5:03 p.m. Respectfully submitted, Karen L. White, Council President SOUTH BEND COMMON COUNCIL KCF:kmf