Loading...
HomeMy WebLinkAbout15. 2016 Budget Hearing Second Public Input MeetingCity of South Bend 2016 Budget Presentation a Community Forum Notre Dame Center for Arts & Culture September 21, 2015 WAR NO GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award nracrrcn To City of South Bend Indiana r,. n. I;xd i � Ikpinn.ryl January 1, 2015 gGsr�ir,- One of only two cities in the State of Indiana to currently receive such an award! Review 2015 Budget Book at: htto: / /docs.southbendin. gov /we bl i n k8 /0 /d oc/573 06 /Electronic.aspx a �x� :i .ras 9/21/2015 1 .T eH Bond Rating Comparison Indiana Local Government Standard & Poor's Bond Ratings July 2014 IE loo South Bend's S &P rating is AA so 60 40 State of IndsAIAA S &P rating zo 0 AAA AA- AA AA- A- A A- BBB+ BBB BBB Why Is this Important? The bond or credit rating is a measure of the City's financial reputation. A good credit rating enables the City to borrow money for construction projects and other needs at the most competitive rates available. This saves ousands of taxpayer dollars in interest payments. Context for the 2016 City Budget • Growth and strength — South Bend's economy and population are growing & civic energy is high, while financial reserves remain healthy • Fiscal limitations — despite economic growth, property tax revenues are flat while personnel costs are rising • Major initiatives on track — major initiatives like Group Violence Intervention (GVI), Vacant and Abandoned (V &A) Properties, and Smart Streets are proceeding with funding from 2013 -2015 9/21/2015 2 Vision Principles for 2016 Budget Continuing our Comeback • Inclusion — ensure everyone shares in progress on jobs, safety, and quality of life • Innovation — use updated practices and technologies to deliver better services more cost - effectively • Sustainability — manage costs and investments to sustain long -term fiscal stability 2016 Budget Kickoff Council Priorities ❑ Economic Development & Job Training ❑ Public Safety, Neighborhood Patrols & Shot Spotter Program ❑ Investment in Parks • Neighborhood Infrastructure (Curbs, Sidewalks, Light Up South Bend Program) • City Corridors (Western Avenue & Lincoln Way) ❑ In -Fill of Lots for Vacant & Abandoned Housing ❑ Code Enforcement (Illegal Dumping, Graffiti & Grass Program) ❑ Diversity in City Workforce at All Levels , 9/21/2015 3 2016 Budget Highlights Economic development, jobs and workforce development - • $14 million to support continued job growth and investment and additional $9.6 million for infrastructure to support growth • $70,000 for SMART workforce training program with Work One and Ivy Tech • $95,000 for Recruitment, Retention and Skills Training • $32,000 for Bridges Out of Poverty Employee Resource Network (2015 dollars) • Project Lead the Way (2nd of 3 year roll -out to all Public Schools in the City) • New dual- credit firefighter training program with the SBCSC and Ivy Tech ➢ Investing in neighborhoods • $1,027,791 in Property Management (mowing, trees, acquisition of vacant parcels) • $1,088,750 on Vacant to Value (grants, tool libraries, legal assistance) • $1,500,000 of Southeast Area Plan Streetscape Improvements • $900,000 on Cemetery/West Washington Area Streetscape Improvements • $200,000 on Light Up South Bend • $750,000 on Curbs and Sidewalks • $228,000 (net of $192,000 matching grant from State) on Safe Routes to School 2016 � hts Budget Highlights Cont. 9 9 g ) •� ➢ Public safety �- • $76,365,255 for Police and Fire, 25% of overall City budget • $165,000 for Shot Spotter • New Senior Human Resources Generalist to focus on Public Safety Human Resource needs and issues • New Hazardous Materials Response vehicle to replace aging truck over 25 years ➢ Parks & recreation for quality of life • $188,000 on Made Men Youth Mentoring Program • Major upgrades planned for Howard Park Ice Rink and Charles Black Center using 2015 EDIT Park Bond Funds. ➢ Appropriate compensation • Raising minimum wage for all full -time city employees to $10.10 over three years • Using efficiency gains to enable a 2% increase to salary caps for all non - bargaining employee groups • Accommodating a 20% increase in health insurance charged to all departments • Consolidating temporary, part -time positions to create 5 full -time solid waste pickers 9/21/2015 N ;.:N Xhti 2016 Budget Highlights (cont.) ➢ Diversity, inclusion, and opportunity • New Diversity Inclusion Officer to drive strategic initiatives across the Administration and perform duties of former Diversity Compliance Officer • Municipal IDs available to every City of South Bend resident ➢ Sustainable fiscal path • Balanced budget for General Fund • Budgeted Revenues = Budgeted Expenditures • Keeping other funds on track for long term balance ➢ Better, more efficient services through innovation • $3.2 million for Office of Innovation and Information Technology • Innovative financing to leverage minimal taxpayer dollars to unlock $5M of energy efficiency renovations at Century Center „fit �H i Flat Projected Property Tax Revenues Due to State Circuit Breakers. 60,000 55,000 50,000 45,000 40,000 35,000 30,000 Ne[Levy (in thousands) 2009 2016 2017 2018 2019 2020 Actual 2030 Actual 2011 Actual 2012 Actual 2013 Actual 2034 Actual 2015 Actual Estimated Estimated Estimated Estimated Estimated $55,869 $50,333 $48,076 $46,791 $44,831 $45,274 $44,897 $46,156 $46,753 $47 9/21/2015 5 ,644 $48,548 $45,469 9/21/2015 5 General Fund, PS LOIT, COIT & CEDIT Local Option Income Tax (LOIT) ;Y 2016 Proposed Expenditures By Department Revenue Trends 'W+ Mayor, Clerk and Council Admin, Finance, Legal & 2010-2016 8% Engineering $25 1% Information Technology & Office of Innovation Debt Service 4% $20 4% Public Safety w $15 2016 _o Budget Mayor, Clerk and Council • PS LOIT f 6,691,006 Engineering 1,120,334 . COIT $10 Public Safety 54,151,958 Debt Service •CEDIT $5 12,888,442 83.034.523 Definitions $0 CEDIT = County 2010 2011 2012 2013 2014 2015 Est. 2016 Est. Economic Year CEDIT COIT PS LOIT Total Development Income 2010 9,090,415 7,648,824 6,078,454 22,817,693 TeX 2011 2012 7,300,866 7,097,462 5,293,619 9,068,785 8,610,742 6,605,601 19,691,947 24,285,128 COIT = County 2013 8,177,352 7,846,939 5,892,386 21,916,677 Option Income Tax 2014 8,796,821 8,645,811 6,380,029 23,822,661 PS LOIT = Public 2015 Est. 9,181,206 8,859,912 6,466,190 24,507,308 Safety Local Option 2016 Est. 9,364,830 9,037,110 6,595,514 24,997,454 Income Tax General Fund, PS LOIT, COIT & CEDIT �"' "•F�a 2016 Proposed Expenditures By Department 'W+ Mayor, Clerk and Council Admin, Finance, Legal & 2% General Operations 8% Engineering 1% Information Technology & Office of Innovation Debt Service 4% 4% Public Safety 65% 2016 Preliminary Budget Mayor, Clerk and Council 1,704,890 Admin, Finance, Legal & General Operations 6,691,006 Engineering 1,120,334 Information Technology & Office of Innovation 3,196,056 Public Safety 54,151,958 Debt Service 3,281,837 Econcomic Development & Neighborhoods 12,888,442 83.034.523 9/21/2015 C1 2016 Budgeted Expenditures Across All Funds General & Administrative, 6% Internal Service Funds, Mbi 10% Neighborhoods, 13% Public Safety, 25% Utilities, 28% Economic Development, 18 General &Administrative Public Safety Economic Development Utilities Neighborhoods Internal Service Funds Other Costs Total Expenditures 2016 2016 Proposed Percent of Budget Total 17,496,953 6% 76,365,255 25% 56,161,558 18% 85,705,062 28% 39,892,953 13% 29,314,878 10% 20,000 0% 304,956,659 100% 9/21/2015 7 2016 Proposed Expenditures Across All Funds r>v =� City of South Bend - Expenditures E . . 1 ■ Internal Service Funds _`o ■ Neighborhoods ■ Utilities ■ Economic Development ■ Public Safety ■ General &Administrative Note: Overall City Budget for Proposed 2016 is $304,956,659 9/21/2015 7 . . 1 9/21/2015 7 yV R � 2016 Budgeted Full -Time Headcount Summary General Government and Other, 101 Code Enforcement /Animal Control, 28 Dept. of Community Investment, 25 9/21/2015 i Budgeted Full -Time Positions � N 1.200 1,150 1,100 1,050 1,000 160 1,161 950 1,096 1,100 900 850 800 2012 Budget 2013 Budget 2014 Budget 2015 Budget 2016 Proposed Budget yV R � 2016 Budgeted Full -Time Headcount Summary General Government and Other, 101 Code Enforcement /Animal Control, 28 Dept. of Community Investment, 25 9/21/2015 i Community Investment 2015 Accomplishments Unemployment & Population 120,000 — 14.0 100,000 _ 12.0 10.0 80,000 — 8.0 60,000 6.0 40,000 — 4.0 20,000 — 2.0 0 0.0 2011 2012 2013 2014 2015 iiiiiiiiiiiiiTotal Population Labor Force Population IIIIIIIIIIIIIlUnemployed Population-* Unemployment Rate Private Investment $250,000,000 $200,000,000 2"," $150,000,000 $100,000,000 $50,000,000 $- 2012 2013 2014 2015'thru July ■ Combined ■ County ■ City --- • 1 1 1 O Blacklhom Golf Course 1 I 014-2015 © Chase Plestics © Colfax Are. Streelxepe 0 College Football Hell of Fame Refuse Calforete Wings Downtown 2 Way Street Conversion O Emporium Infrastructure f East Bank C50 phase 5 & Trenspo Inhastructure J J ( \ Ij ! �` Q Fed Ex i, Fellows SL Improvement Protect Heraeus RUlfer Hill St. Infrastrmcture Hill & Cofax Mixed Use n Hoffman Hotel I 0 Hubbell Raw Ignition perk Infresbucture Phase 2 f C-) J IJ (sue �j` _ J I QD Igndion Perk MultfTenanl Building I I I} / J t. i () R ' LaSalle Hotel Rehab J ®lmcanwrry Weft Ramping S UppeH Components Ma)[erBulll Meuo. & sledlson 2 Way NSTI Expansion Nell. Corporation Noble America Nouns Renaissance Dntrip Schafer Geai ��ae ytstaw,arsefnrrei. _ ��' South Bond Chemical r oaacssrm owevrw _ _f _ — I` j �. Spec Building- Ameriplex rsresewn�row.rncr I _ ,� Success Academy -j _ South East Mester plan _� mwsss.wsarwev�w. IDmmolHe Gry Cemeter plan } I J I I Yummy Cupcakes lT7 Westem A.P. Streetscape 9/21/2015 ri City of South Bend " k 2016 Proposed Budget Concluding Thoughts • Overall City budget of $306.7 million — reduced overall expenditure from 2015 due to lower capital spend — expenditures higher than revenue mostly due to timing of bond proceed usage for infrastructure investments • General Fund budget of $53.8 million is balanced (slight surplus) • Reliance on COIT and CEDIT to sustain key expenditures, while moving toward long -term balance • City budaet maintains our citv's comeback throuah: continued investment in our neighborhoods, city center, and people use of technology and efficiency to drive results maintaining resources needed to keep high levels of service measuring our performance for continuous improvement Keeping in Touch and On Track During the Year: Reports Available on the Web http: / /docs. southbendin. gov /webIink8 /Browse.aspx ?startid= 1214 &dbid =0 • Annual Reports Budget Documents - available throughout the budget process, typically beginning in mid - August — Annual Comprehensive Annual Financial Reports (CAFR) - available by July 31 st of the following year Fiscal Dashboard - will be available around March of the following year • Monthly Reports — Controller's Monthly Cash Report - available by the 10th of the following month — Departmental Financial Report - available by the 20th of the month — Financial Report - available by the 20th of the month — Cash Reserves Report - available by the 15th of the month 9/21/2015 10 Appendix 9/21/2015 11 Glossary Activity BUjget(s): Cost centers or specific and commonly recognized service functions within a fund or department to which specific expenses are to be allocated. Ad Valorem: Imposed at a rate percent of the value as stated IN DETERMINING PROPERTY TAXES. Appropriation: An expenditure authorization made by the COMMON Council, which permits charges against specified funding sources. Appropriations are usually made for fixed amounts and are typically approved for the entire fiscal year unless otherwise amended by the City Council. Approved/ Adopted Budge: The City's budget & expenditure authority as adopted by the COMMON Council in a vote conducted after a City Charter - required public hearing to collect public input on the Proposed Budget. Assessed Valuation: The estimated value placed upon real and personal property by the COUNTY Assessor. Assets: Property owned by the City, which has monetary value. Audit: A systematic examination of resource utilization concluding in a written report. It is a rest of management's internal controls and is intended to: • Ascertain whether financial statements fairly present financial positions and results of operations; • Test whether transactions have been legally performed; • Identify areas for possible improvements in accounting practices and procedures; • Ascertain whether transactions have been recorded accurately and consistently; • Ascertain the stewardship of officials responsible for governmental resources. • Certain audited funds related to trustee accounts, bonding and capital leases are not budgeted or included in this document. Balanced Budget: The budgeted revenues (plus available cash reserves) are equal or more than the budgeted expenditures. Base Budget: The budget predicated on maintaining the existing level of service. 12 Bond (Debt Instrument): A written promise to pay (debt) a specified sum of money (called principal or face value) at a specified future date (called the maturity date) along with periodic interest paid at a specified percentage of the principal (interest rate). Bonds are typically used for long -term debt to pay for specific capital improvements. Budget Amendment: Adjustments made to the budget or approved expenditure authority during the fiscal year by the Common Council to properly account for unanticipated changes, which occur either in revenues or expenditures or for programs or policy objectives initially approved for the fiscal year. Budget (Operating): A plan of financial operations embodying an estimate of proposed expenditures for a given period (typically a fiscal year) and the proposed means of financing them (revenue estimates). The term is also sometimes used to denote the officially approved expenditure ceiling under which the City and its departments operate. Budget Basis: The basis by which a city determines its budget. The budget basis may be cash, accrual, modified accrual or some other basis. The city of South Bend uses the cash basis for budgeting. Budget Calendar: The schedule of key dates or milestones that the City follows in the prepararuon and adoption of the budget. Budgetary Control: The level at which expenditures cannot legally exceed the appropriated amount~. Budgeted Funds: Funds that are planned for certain uses. The budget document that is submitted for Common Council approval is composed of budgeted funds. Budget Message: Initially, a general discussion of the proposed budget document presented in writing as a supplement to the budget document. The budget message explains principle budget issues against the background of financial experience in recent years and presents recommendations. Capital Expenditures: The expenditures for the acquisition of capital assets; whether major assets with long -term useful life spans or shorter -term operational capital needs such as office equipment, small tools & machinery. The expenditures are financed by either capital debt or cash - pay-as- you -go. Generally, equipment with a cost of $10,000 or more and a useful life of at least one year is considered a capital expenditure. 13 Cash Management: The management of cash necessary to pay for government services while investing temporarily idle cash in order to earn interest. Cash management refers to the activities of forecasting the inflows and outflows of cash, mobilizing cash to improve its availability for investment, establishing and maintaining banking relationships, and investing funds safely in order to achieve the highest interest on temporary cash balances. CIP: Abbreviation for Capital Improvement Program. COIT: Abbreviation for County Option Income Tax. COIT is based on wages paid in the county. ContingencX: An estimated amount of funds needed for deficiency or emergency purposes. An annual appropriation to cover short falls in revenue and /or underestimation of expenditures. Contractual Services: Items of expenditure from services that the City receives from an outside company. HVAC, maintenance, custodial services, Building, Mechanical, and Plumbing Inspectors are examples of contractual services. CPI: Abbreviation for Consumer Price Index. Dcbt Service: the City's obligation to pay the principal and interest of all bonds and other debt instruments according to a pre- determined payment schedule. Department: A major activity of the City, which indicates overall management responsibility for an operation of a group of related operations within a functional area. Depreciation: That portion of the cost of a capital asset, used during the year to provide service. DLGF: Abbreviation for the Indiana Department of Local Government Finance. The DLGF is a state agency that approves the budgets and property tax rates. EDIT: Abbreviation for Economic Development Income Tax. EDIT is based on wages paid in the county. Enterprise Fund: A governmental accounting fund in which the services provided are financed and operated similarly to those of a private business. The rate schedules for these services are established to ensure that revenues are adequate to meet all necessary expenses. Enterprise funds are established for services such as water and sewer utilities. Estimated Revenue: ThC amount of projected revenue to be collected during the fiscal year. 14 Fund: An independent fiscal and accounting entity with a self - balancing set of accounts for the purpose of carrying on specific activities or attaining certain objectives. Expenditure: The cost of Governmental Fund goods delivered and services rendered, whether paid or unpaid. Fund Balance: For financial reporting, fund balance is the difference between assets and liabilities in a governmental fund. Fund balance is required to be reported in two components — reserved and unreserved. When fund balance is reserved, it either means that the resources are in a form that cannot be appropriated and spent or that the resources are legally limited to being used for a particular purpose. For instance, grant monies from the federal government that may be used only for a road project would be reported as reserved fund balance in a street fund. Likewise, the City's cemetery trust funds in the General Fund are nonexpendable resources that can be invested but not spent —as reserved fund balance. The portion of fund balance that is not reserved is fittingly called unreserved fund balance. For budgeting, fund balance is equal to cash balance as the city utilizes the cash basis of budgeting. GAAP: Abbreviation for Generally Accepted Accounting Principles. GASB: The Governmental Accounting Standards Board, which provides direction in accounting and reporting requirements for units of government. General Fund: The largest fund within the City, the General Fund accounts for most of the financial resources of the government that may be used for any lawful purpose. General Fund revenues include property taxes, licenses and permits, service charges, and other types of revenue. This fund usually includes most of the basic operating services, such as police protection, finance, public services and general administration. General Obligation Bonds: When the City pledges its full faith and credit to the repayment of the bonds it issues, those bonds are General Obligation (G.0) bonds. GFOA: Abbreviation for Government Finance Officers Association. Investment: Securities purchased and held for the production of income in the form of interest. KPI: Abbreviation for Key Performance Indicator. Also known as performance measure. Liabilities: Debt or other legal obligations arising out of transactions in the past, which must be liquidated, renewed or refunded at some future date. The term does not include encumbrances. 15 Long Term Debt: Debt with a maturity of more than one year. Maturities: The date on which the principal or stated values of investments or debt obligation mature and may be reclaimed. Net Debt: All City Debt net of special assessment, transportation fund and revenue bond debt. Per Capita basis: Per unit of population. Revenue: An addition to the assets of a fund, which does not increase a liability, does not represent the recovery of an expenditure, does not represent the cancellation of a liability without a corresponding increase in any other liability or a decrease in assets, and does not represent a contribution of fund capital in an enterprise. SBOA: Abbreviation for the Indiana State Board of Accounts. The SBOA is a state agency that performs the function of private accounting firms in other states. Surplus Funds: Liquid or Non - Liquid Funds not immediately needed to pay demands against vendors and other claimants as determined by management. Structurally Balanced Budget: A budget that is sustainable for multiple years into the future. Tax Base: The total value of taxable property in the City. TIF: Abbreviation for Tax Increment Financing. A fund that captures the increase in net assessed value on properties in an area to provide property tax revenue for economic development projects. Transfers- IN /OUT: A legally authorized funding transfer between funds in which one fund is responsible for the initial receipt and the other fund is responsible for the actual disbursement. Trust and Agency Fund: Trust and Agency funds are used to account for assets held by the city in a trustee capacity or as an agent for individuals, organizations, other governments, or other funds. Utilities Fund: This enterprise fund is used to account for the provision of water, SEWER and SOLID WASTE services to the customer financed primarily by user charges. Working Capital: Working Capital is generally defined as current assets less current liabilities; however, this is to some extent, an abstract concept. If all of the current assets were converted to cash at their book value and all the current liabilities paid, then working capital would be the amount of cash remaining. For the City's Utilities Fund, current assets are comprised of cash and cash 16 equivalents, receivables and inventory; and current liabilities are comprised of accounts payables, accrued liabilities and the current portion of next fiscal year's long -term debt. 17