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HomeMy WebLinkAbout08-17-04 Personnel & Finance ' r Commit z,f?&o'Lt of the .. E.T6.onnzi and 9inanae Co n n itttE of the S0utp common '0 2p The August 17, 2004 meeting of the Personnel and Finance Committee was called to order by its Chairperson, Council Member Derek D. Dieter at 6:30 p.m. in the Council Informal Meeting Room. Persons in attendance included Council Members Dieter,Pfeifer,Kelly,Varner,Kuspa, Coleman,White and Kirsits;Mayor Stephen J. Luecke, City Clerk John Voorde, City Controller Frederick B. 011ett III,Community&Economic Development Executive Director Sharon Kendall,Police Chief Thomas Fautz,Fire Chief Robert X. Quinn III, Communications& Special Projects Director Mikki Dobski Shidler,City Attorney Charles S. Leone,Manager of Secretarial Services Mary Ann Myers Morris Performing Arts Center Executive Director Dennis J. Andres Assistant City Attorney John Livingston,Parks&Recreation Superintendent Phil St. Clair, Director of Environmental Services Jack Dillon, and Kathleen Cekanski-Farrand, Council Attorney. Council Member Dieter noted that the Committee is composed of Council Members Kelly,Puzzello, Varner and himself. Council Member Dieter stated that today's committee meeting is the first of several scheduled on the proposed 2005 civil city budget. He then welcomed the Mayor to provide a city-wide overview. Mayor Luecke thanked the Council for the opportunity to provide introductory comments. He noted that the proposed budget is a plan for services for our community. A high level of services will continue to be delivered. He thanked Mr. 011ett and Mr. Skarbek for the preparation of the massive, detailed budget document. The Mayor also thanked the Common Council for the time which the members are willing to dedicate to reviewing the material and holding public hearings. He noted that five(5)ordinances would be presented over the next several weeks, namely one addressing the levying of taxes and fixing the rate of taxation, one which would appropriate monies for the 2005 fiscal year, one which would appropriate monies to defray expenses of the enterprise funds for calendar year 2005, one which would establish salaries and wages for appointed officers and non-bargaining employees,and one which would set the annual salaries for the Mayor and Clerk. The Mayor noted that capital needs will be addressed in early 2005. Mayor Luecke stated that the city would levy for the full increase permitted under the new formula which results in a 4.4%maximum increase. This would result in approximately$2 1/2 million additional; however he also noted that the increased costs for the raises for Teamster employees and the Police and Fire Department are approximately$ 2 1/2 million. The Mayor then highlighted portions of the pages set forth in the notebook tabbed page entitled"Summary Overview". Anticipated revenue in 2005 is$169 million($168,994,215); and the projected 2005 operating budget is $155 million($155,346,244). Mayor Luecke stressed Personnel and Finance Committee Meeting of August 17,2004 Page 1 r [ Cn p ommit ,ez cRE,20'Lt of ti2E n ti 2z / /j ,p �E'L3onnEL and 9inanaE eommitttE of tl2E�Outil BEncl £?ommo eOuna that the budget as proposed adequately funds projects; provides raises for employees; addresses cash reserves; and permits the city to invest in ongoing initiatives. "Strong fiscal health" describes the state of the city's finances. New revenue sources developed over the years have helped,along with COIT monies and wheel tax revenues. There have also been one-time distributions. Challenges include the rate of growth and growth of expenditures especially in the public safety sector. Challenges also include the uncertainty of the reassessment process. $6 million in back taxes have not been collected and once they are they will be placed into a reserve account and reduce the tax rate in future years. Reducing the cap on levy growth will also be a challenge with all of these putting a"pinch on capital budgets". Mayor Luecke concluded his remarks by stating that choices will have to be made together. Mayor Luecke then called upon City Controller,Rick 011ett,to provide further fiscal information to the Committee. Mr. 011ett stated that he would be happy to sit down with the Council at any time. The proposed budget is"balanced and fiscally responsible" and he then highlighted a variety of projects. He noted that the city is in a better condition than the national, state and several local areas; however there are escalating pension and insurance costs. Mr. 011ett stated that the proposed budget permits the city to address the primary goals of the City Administration's theme of"We're Building South Bend"by addressing: Smart Growth, Safe City and Clean City initiatives. The budget will be the"key evaluation tool"and addresses all operating and debt services with capital requests being addressed early next year. The budget "addresses 69 departments". A 5%maximum was permitted in the past with 4.4%being the maximum under a new formula based on growth determined by Local Government Finance, with this resulting in a reduction of$350,000 to$500,000. The formula has a maximum cap of 6%. 76%of the budget addresses needs related to public safety with this amount not including capital or pension expenses. Public safety is the city's highest priority. Pension costs will be $10.5 million with an additional $ 2 million annually for cars and vehicles.. Mr. 011ett noted that the merit bonus program will be reduced by 2/3's. The Deferred Retirement Option Plan(DROP)front loads pension costs and it is anticipated that more will participate in DROP. The budget will reflect a loss of three(3)full-time employees. He noted that it also calls for two(2)additional members are requested to be added to the Board of Public Safety. Approximately$2 million is expected from wheel taxes. Spending guidelines requested a zero increase in supplies and a zero increase in other services with gasoline and natural gas being exempted. The city is locked into a 12-month contract now which is based on a therm rate. In response to a question from Council Member Dieter,Mr. 011ett stated that the city is reviewing its vehicle inventory and is aware of his inquiry to Matt Chlebowski,Director of Central Services.. A presentation will be given on insurance,noting that in the 1st 26 weeks of this year claims are significantly below last year's. There were eleven(11) seriously ill employees in Personnel and Finance Committee Meeting of August 17,2004 Page 2 eomrnitfg cREI2c rt of tI E$lonnd and 9inanaz eommitt of tI cSoutI . End eommon C?ounei� 2003, and to date there have been two(2)seriously ill employees this year. There are six(6) funds which are not balanced; and there are three(3)funds which do not have adequate fund balances(Central Services,Parking Garage Fund and Park Department Fund for Special Events). Mr. 011ett stated that risks include the unpredictability of property tax,noting that an additional tax anticipation warrant will be requested of the Common Council later this year.$64,000 were paid in costs for the 2003 tax warrants. EDIT and COIT are anticipated to be 15%less or approximately$1.1 million. Pensions have guaranteed payments and PERF has increased the required funding from 3 1/4%to 4 1/4%. In the next 12-18 months City Plan should be completed. Facts. figures, programs and services will be highlighted over the next few weeks. In response to a question from Dr. Varner,Mr. 011ett stated that there will be$680,000 in gaming revenue anticipated which is found in the general fund. Pension costs are a"net dollar cost to the city". Mayor Luecke stated that pension relief of 50%is guaranteed through 2007, and currently the city is required to fund two(2)different pension programs. He noted that Speaker B. Patrick Bauer has appointed him to a Local Government Efficiency Commission"which will address such topics as consolidation. Indiana state tax is 49th of 50, with local government rates being closer to the United States average. The Mayor noted that there is alot of detail and that the City Administration looks forward to the upcoming sessions. Council Member Kirsits inquired about the hydrant tax. Mayor Luecke stated it is not a revenue and would show up in the water budget with$ 1.2 to $1.3 million being addressed. (See Tab 620) Council Member Dieter noted that Mr. Andres has a conflict with the current date set for his cost center, and therefore noted the following NEW TIME AND DA'Z'E when the Personnel and Finance Committee will hear the following presentation: Morris Performing Arts Center& Palais Royale September 7,2004,5:30 p.m. Following discussion and other potential conflicts,the following NEW TIMES AND DA'Z'ES were established,with all others as listed in the August 10th meeting notice remaining the same: Code Enforcement September 8,2004,5:30 p.m. thereby canceling the committee meeting on September 2nd. Personnel and Finance Committee Meeting of August 17,2004 Page 3 nn C_:.OnnnitteEZ CRE/2O'Zt of ti2E n p p (jam .E'L�OnnEL and 9tnancE Conanzittt& of the South Ezn eOm on Conned Mikki Dobski Shidler noted that a Business Expo will conflict with September 16th which is currently listed as a"Date open for department/bureau conflicts in schedule or follow-up discussions". Under miscellaneous business,Jack Dillon provided copies of a"Media Packet"dated August 17,2004 entitled"South Bend clean City Container Program" (copy attached). There being no further business to come before the Committee, Council Member Dieter adjourned the meeting at 7:27 p.m. Respectfully submitted, Council Member Derek D. Dieter, Chairperson Personnel and Finance Committee KCF:kmf Attachments Personnel and Finance Committee Meeting of August 17,2004 Page 4