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Home My WebLink AboutF. 2014 Budget Overview Presentation 08-14-13Budget Presentation 2014 Good evening and thank you for this opportunity to present an overview of our proposed budget for 2014. Introduction South Bend's comeback is now well underway. People both inside and outside of our community have taken note of a new civic energy, with improvements in the physical and the psychological environment of our community. Soon it will be two years since this administration and this Council were elected with a clear mandate to provide a fresh start for South Bend. Two things are clear. First, we have seen a change in South Bend's trajectory, with a clear difference in our priorities, our way of doing business, and our ability to deliver. Secondly, we are by no means there yet. We have to make sure that each year, our city's comeback accelerates. Each passing year we need to be better equipped, better organized, better prioritized. And as a government, our framework to do that each year is the budget. South Bend's comeback is now well underway. A budget is not just a fiscal document. It's a statement of our priorities. Give or take a couple days, the deadline for passing this year's budget represents the two -year mark since 2 this administration and this Council were elected. This coming year is brings a chance to consolidate our gains, and accelerate down the right track. r Ne"'"w"""sweek .., America's Two years ago, South Bend was busy debating whether or not we were a dying city. Newsweek — wrongly of course —said our community was on the list of ones that were not going to make it. nu 0116A 60 FOR BROKE; NIKE,NFI -SSS OISVySRISKY BUSINESS FASTCIVIP 3Da(paOtO ?� , 1 IZ041MAtON the most love' 110,101,111,411.11, d.11, ; THE WALL STREET' JOURNAL. KING � ^� � _ ___...._. Hackers Called Into Civic Duty ( ld-go. Other 011 I4orA IVyh Programmers BE 70 �•` L,—ge Dam T —for Public R use L Even a smaller city, such as South Bend, Ind, can to help sort city data'1he bottom line is all this di 'pklnp mxrrm.�, to the pubi c,'sa,d South Bend Mayor Pete Bultigie 4PPIE, A it's not a radical policy shift' NEIEID OOOQE WAIMAI '4w; HOW SOUTH BEND, INDIANA SAVED $100 MILLION BY TRACKING ITS SEWERS .f ..MAN 4 ..r - s'..Cbon 6 Barcelona I Spain 1 O Boston. Massachusetts I USA 14 Busan I South Korea 18 Oulu I Finland 22 Rio do Janeiro I Brazil 26 Video Interviews with Experts 30 Rivas faciamadrid I Spain 34 San Francisco. Caldorfla I USA 38 Singapore I Singapore 42 South Bond. Indiana I USA 46 Stockholm I Sweden What a difference two years can make. In the last week alone, we were cited in Fast Company magazine for our work on wastewater management, our data center economy, and our Code for America engagement. And just yesterday, we had favorable coverage in the A section of the Wall Street Journal, citing our use of data. That's just in the last week. The Smart Cities expose put us alongside Singapore and San Francisco as one of the world's smart cities to watch. Last year NPR told the entire country about our story and our framework for setting a new economic direction. Our reputation is turning around. Even more importantly, people here at home are gaining confidence because they can see progress with their own eyes. The emerging renaissance of residential, cultural, and dining activity has been unmistakable in our downtown area. 21 South Bend's comeback is now fully underway. The Business section of the Tribune brings stories of new restaurants and job expansions where we used to see only closures. Hundreds of jobs have been added or retained. On the West Side, the Bosch facility is coming back to life. The near South side of downtown boasts a ballpark rated as the best stadium improvement in America last year. Citywide, over $23 million in private investment has been secured in City - related projects this year alone. Our website is winning awards; our 311 center takes thousands of calls a week; jobs are up, crime is down, population appears to be holding steady. None of this happens on its own, and none of it can be taken for granted. To keep up the progress, we have to push harder. We have to continue doing what works, and even more importantly, we are nowhere near finished when it comes to changing the way South Bend does business. We have to organize and fund an administration capable of delivering on the expectations of the people who voted us into office. Most people in South Bend believe we are on the right track, but they also are impatient for us to do more. At no time in the entire year do we get a better chance to make sure that happens than now, in this conversation and this series of decisions, as we prepare our budget for the coming year. We have to fund myriad competing, valid, and vital priorities. We have to organize and adequately compensate over a thousand hard - working City employees. We have to maintain our credit status as the most highly -rated class 2 city in the state of Indiana. And we have to do all of it within the constraints of a hard ceiling on property tax revenue. All while balancing the general fund budget and maintaining adequate cash reserves. Tonight I am introducing our plan to do that for 2014. That's what this budget is about. .SCIUTIIbE.,' O V What South Bend must be Our goal is to ensure South Bend is a strong and open city for everyone, where: • The basics are easy for residents • Government services are first -rate • Everyone can thrive Every time I get a chance, I remind everyone of the three mission elements of the City government. First, we make the basics of life easy for citizens. Since holding down a job, raising a family, getting through school, is tough enough on its own, we see to it that residents can do all that without worrying about whether their drinking water is clean, their streets functional, their neighborhoods safe. Second, we offer good government— cost - effective services delivered quickly and professionally by a transparent government that puts citizens first. And third, the most urgent thing in front of us, related to the other two —we create an environment where everyone can thrive, promoting job creation and economic development by every means available. In this year's budget, you will see a number of cross - cutting initiatives that make our city better at doing these three things. It's about continuing to change the way we do business in order to accelerate South Bend's comeback. Over and above funding our basic priorities, balancing our general fund, keeping police 0 officers and fire fighters on the street and water running through our pipes and doing all the things a city must to do be worthy of the name... over and above that, we have changes we have to make that cut across our departments, our funds, our districts. 0 Investment Ready Places • Proposed 2014 Investments • $32.Om for investment ready places and people • $11.4m for Smart Streets • KPIs • 210 jobs created in 2013 • $623,000 public investment leveraged $23.4m in private investment so far in 2013 • We must create the kind of places where people want to live and business want to invest. Creating jobs / streets Five years after the housing bubble burst, all eyes continue to be on the economy first and foremost. Last year we added 1,600 jobs, but we have a long way to go. We must work to continue to drive investment and grow jobs, and this budget makes that our top priority using old tools and new ones. The strategy comes down to this: we must create the kinds of places where people want to be and businesses want to invest. Not because of advertising, but because it's the right answer for them. Hundreds of jobs and over $40 million in investment are on the line, just in deals the department is working on right now. This means developing investment -ready places. The economic development budget includes the completion of a multi- tenant building to house the newest tenants in Ignition Park. With the Ivy Tower building sold last year, we will push to completion of the building's remediation to enable the Renaissance District to remain on a path for tens of millions of dollars in investment. We plan to grow Eddy Street Commons and Blackthorn. The most important things a City can do to foster development has to do with foundations. The skeleton, the basic services, the infrastructure. Most noticeably, the streets. If we want to realize our economic potential, our city needs to invest in vibrant streets. Right now, 7 many of our streets have an appearance or a design that actually destroys value. We need to turn this on its head, creating value with investments needed to create smarter streets. This means lifting up our corridors, and straightening our downtown traffic patterns. In the late 1960s and 1970s, it became commonplace to convert streets in American cities to a one -way pattern. Streetscape features became less of a priority, and the pedestrian was all but forgotten. A generation of urban experience has shown this to be a mistake, and cities across America have spent the last twenty years rethinking their streets, especially their corridors and downtown areas, to make sure they are set up to support organized city life. The current pattern of streets in our city is destroying value. It is depressing exchange, and delaying our comeback. We need to get with the times. Our 2014 budget paves the way for interventions on key corridors and downtown thoroughfares that will create rather than destroy value, enhancing the look and feel, ease of navigation, pedestrian safety, and economic viability of critical South Bend streets. This leads me to another key aspect of our job creation agenda, human capital. Smart streets are just part of how we attract and retain the qualified workers you need for a growing economy. We will also launch a workforce development initiative and a deconstruction effort that builds skills and supports direct employment in the context of tackling vacant and abandoned homes. 7 Vacant and Abandoned Housing • Proposed 2014 Investments • $2m for repair and demolitions • $300,000 for deconstruction (12 jobs) • 2013 KPIs • 45 houses repaired • 19 houses demolished • Increasing the value and improving the quality of life in our neighborhoods is critical. Vacant and abandoned homes More broadly, the effort to conquer our issue of vacant and abandoned homes continues. Earlier this year I challenged our community to muster the resources to repair or demolish 1,000 houses in 1,000 days. Already dozens of houses have been taken of the vacant and abandoned list, through a combination of demolition and repair. The work continues in 2014, and this budge gives us the resources we need to stay on track. `!Ml ' Information Technology • Proposed 2014 Investments • $5.Om in employee, services, and capital • KPIs • 7,371 service calls to IT (target of 6,000) • Future measure: Our Technology IQ • Strategy provides clarity to our services, our partnerships, our integration with other government entities and our community engagement. Information technology We're budgeting for a more robust IT infrastructure and strategy for our city. IT no longer means just fixing computers. All organizations, including cities, must use technology wisely if we are to compete and deliver on our mission. A huge part of South Bend's improvement in reputation in recent years relates to our new openness to technology. One of my favorite things has been the disbelieving and fascinated tone of reporters from around the country as I tell them about our use of technology. Getting this right will enable all three of the mission priorities of our city— making the basics easier, delivering good government, and creating jobs. 9 Customer Service • Proposed 2014 Investments • $480,000 for 311 • 7 employees for 311 • KPIs • —62% of calls answered within 30 seconds (target is 65 %; best practice 80 %) • 57,648 calls taken to date (50,000 goal for 2013) • Residents expect and deserve exceptional customer service. Customer svc When it comes to making good on residents' expectations that we change the way we do business, nothing is more fundamental than customer service. Are we an easy city to deal with? What's it like doing business here? We've come a long way —our 311 center has handled over 50,000 calls already in about six months, and our Department of Community Investment now offers a single point of contact for all business assistance inquiries and needs. This budget continues to reallocate resources to 311 and ensures that business assistance is properly staffed so that we can build on these gains and beat expectations — whether the customer is a resident with a water bill question, or a major business making a site decision. 10 Executive Branch Organizational Structure. • To be effective and efficient, we need an organization and compensation structure that further professionalizes city government. Org chart Sometimes changing the way we do business means changing your organization, your structure, to make it happen. As you know, I have repeatedly made the case for us to have an organization and compensation structure that professionalizes city government, and most of our successes trace back to our ability to recruit and organize for a truly professional city administration. Much of our effort last year went into restructuring the DCI which now is much more nimble and effective. The need to evolve continues, in order for us to be effective and efficient, and this organization chart reflects our latest thinking. The biggest change you will notice is that we propose bringing the building department and the code enforcement department under the same heading. This has the benefit of being both more effective and more affordable. It's more effective because we have employees who deal with properties and codes and ought to be working from the same base of information about our properties. More affordable because this requires one staff, not two. And it takes advantage of seasonal variations in the workflow for both departments. We are also normalizing compensation in leadership positions to ensure that there is better equity, both internally and with respect to our peer cities. Finding a way to do this has not been easy in this budget environment, but by making careful choices, and some sacrifices 11 (including pay freezes for myself and a number of other department heads this year), we have ensured that overall payroll changes lead to no overall increase but instead a taxpayer savings compared to business -as- usual. 11 Employees The overall City workforce continues to shrink by a modest amount from year to year. As we drive productivity and efficiency gains with better use of technology and leaner organization, we will [add numbers] continue to see the workforce reduce towards the neighborhood of 1,000 employees. [numbers on slide here] 12 Full -Time Positions OfgpUTll BflO U � ; 19y5 1.400 1,200 1,164 1,160 1,146 1.000 800 600 400 200 0 2012 2013 2014 Amended Amended Proposed Budget Budget Budget Employees The overall City workforce continues to shrink by a modest amount from year to year. As we drive productivity and efficiency gains with better use of technology and leaner organization, we will [add numbers] continue to see the workforce reduce towards the neighborhood of 1,000 employees. [numbers on slide here] 12 Revenue & Expenditure .1�pp7N° Summary 2008 to 2014 x865 1008 1009 2010 2011 2012 2013 2014 2013 -2014 Fund Fund Wma Actual Actual Aebo/ AebrN Actual Amended Proposed Percent Budget Budget Change Revenues General Fund 33.930,404 96.281,658 61,469.946 60. 971.669 63 .585.275 63.932.287 55.721.016 -12.8% Total Special Revenue Funds 44,925,597 49,411,366 60, 382,796 53,375,521 55 ,684,376 65,412,842 54,527,767 •16.6% Total Capital B Debt Service Funds 6.861,960 9. 189.365 7,972,851 7,592.782 7,757,647 8.232.776 7,162,033 -13.0% Enterprise Funds 64,521,513 72,074,502 74,292,685 103,169,961 113,687,196 98,301,469 102,304,631 4.1% Internal Service Funds 20.512.567 78.200.236 15.865,625 17,999,349 21,154,131 23,615,529 24,524,572 3.8% Trust Funds 7,821,320 14,193,476 11,071,500 72,021,517 13,207,579 10,914,226 11,701,582 7.2% Tax Increment Financing Funds 2. 293, 413 22.175, 881 50 ,916.689 29.391,567 28,434,536 27,724,411 27,364,803 -1.2% Redevelopment Funds 1,690,650 2,379,393 6,775,365 2,337.812 1,785.930 3.196,603 3,151,629 -7.4% Debt Service Funds 788,279 45,095 515.797 652.807 23,728 74.550 14.000 -3.8% Tool Revenue 183,325,723 283,950,972 289,183,254 287 ,392,988 305,320,398 301,344,693 286,491,633 4. Expenditures General Fund 66.503,546 61,327,868 59,241,185 61.438.862 63.399.284 64.967.316 55.673,430 -14.3% Total Special Revenue Funds 41,204,024 35,253,141 56, 823, 840 53. 543.871 52,176,078 66.250,748 63,153,197 4.7% TON Capital &Debt Service Funds 7,377,491 10.333.632 8,765,807 7.355.824 9.669.642 12,747.372 11.466,274 -10.0% Enterprise Funds 74,460,088 75.348,774 74,145,059 86,579,570 89,188,333 122,703,541 126,521,534 3.1% Infernal Service Funds 15,461,250 16.099.353 15,876,382 16,864,543 21,636,374 24,615,132 25.408,937 3.2% Trust Funds 11,593,997 11,647,851 11,799,89D 12,323.516 12,215.208 12,844,161 13,106,386 2.0% Tax lnctement Financing Funds 12,654,336 17, 141, 720 22, 186, 208 36 .848.085 30,746,010 48,835,125 42.705,929 -12.6% RedeveloPment Funds 4,OD7,239 4,004,850 5,190,586 8.014,156 2,335,038 2,004,493 5,2T7 706 163.3% Debt Service Funds 170,848 42.595 17.797 253.807 1,497,758 337.050 11,000 .96.7% Total Expenditures 233 ,432,818 231,199,823 254,046,754 283,222,236 282,863,726 355,304,938 343,324,393 d4 Net (50,107,095) 52,751,149 35,136.500 4.170.752 22,456,672 (53,960,245) (56,832,760) 5. • Transfers IN Transfers Out S24,6W,252 fbr tlra 2014 Proposed Budget 13 Five -Year Capital Improvement Plan Summary 2014 2015 2016 2017 2018 Type Budget Projection Projection Projection Projection Sumary by Type Vehicles 4,268,150 3,709,599 4,656,005 5,281,365 4,344,800 Computer Equipment 710,390 1,451,481 1,067,000 1,000,000 1,000,000 Machinery & Equipment 1,787,774 1,134,406 1,270,706 1,342,021 1,168,756 Building & Building Improvements 3,189,000 7,730,000 5,455,000 3,843,400 1,070,000 Land & Land Improvements 43,880,160 10,638,258 4,389,400 6,177,700 6,458,500 Water& Wastewater Systems 37,127,580 26,427,125 25,217,500 24,952,350 24,695,000 Other 338,400 285,000 375,000 290,000 275,000 Total 91,301,454 51,375,869 42,430,611 42,886,836 39,012,056 14 We're coming back... Changing the way South Bend does business Conclusion We are well on our way to delivering the changes that residents hired us to make. In reality, perception, and reputation, our city is improving. That's what's at stake in this budget —not just dollars and cents, but the ability to fuel our city's accelerating comeback. As we come together to review and refine our proposal, the administration needs the partnership of the Council to ensure we continue to live up to the extremely high expectations of our residents. Only by changing our outlook, ...We are well on our way to delivering the changes that residents hired us to make. In reality, perception, and reputation, our city is improving. We're just getting started, paving the way for South Bend to once again become a frontier for re- development. South Bend has large untapped potential for fostering economic growth. We're small enough to be affected by incremental change —and large enough to afford opportunities that will create substantial impact. We're changing the way we do business, embracing what our residents want and working together to become stronger than ever before. An exciting future lies ahead. That's what's at stake in this budget —not just dollars and cents, but the ability to fuel our city's accelerating comeback.]] 15