HomeMy WebLinkAbout08-03-09 Smaller departments still face full impact of tax caps
Office of the Mayor
NEWS RELEASE
Aug. 3, 2009
3:30 p.m.
Smaller departments still face full impact of tax caps
Contact:
Mikki Dobski, Director of Communications & Special Projects, 235-5855 or 876-1564
Personnel layoffs, 5-percent pay cuts, 32-hour work weeks (with a corresponding 20-
percent pay cut) and organizational restructuring are some of the ways City of South
Bend departments are adjusting to live within proposed budgets for 2010.
Initial budget hearings by the South Bend Common Council focused on high-profile
departments with services deemed a high priority by residents (public safety and parks
and recreation). Discussions were largely upbeat with reports of police officers retained,
most firefighter layoffs averted and key park facilities spared closure.
“The remaining budget hearings will be more difficult. We’ll see cuts in personnel and
services that will impact the level of service we provide to our residents,” said Mayor
Stephen J. Luecke. “Yet we’re committed to trying to make up as much of the shortfall as
possible through new efficiencies, streamlined operations and innovative use of
technology.”
Increases in Local Option Income Taxes are projected to generate $16 million in revenue
for the City of South Bend to replace a portion of the $22 million lost to the state’s
property tax caps. Still, the fact that an estimated $6 million in lost property tax revenue
will not be replaced, compounded by an additional $2-million revenue decline from the
global economic crisis, means reductions for every department – for some more than
others.
The new 0.25 percent Public Safety Tax will provide an extra $5 million for Police and
Fire departments. Police will get another $800,000 annually from a three-year federal
stimulus grant. The impact of the 0.5 percent Property Tax Relief LOIT will restore
$900,000 a year for the Parks & Recreation department. Luecke and City Controller
Catherine Fanello have recommended using a projected $4 million from the remaining
LOIT, a 0.2 percent increase in the Economic Development Income Tax, for capital
expenses citywide.
Yet the most recent analysis of projected cuts and revenues left little room to restore
other services and personnel.
“There are some measures we’re instituting citywide – such as pay freezes, cuts in health
benefits and continued reduction in take-home vehicles with related expenses,” Luecke
said. “Yet because each department has different ways of operating, we’ve allowed
flexibility for directors to determine the most effective way for them to reach their
targeted cuts. Some have chosen reduced hours and salaries to avert further loss of
personnel.”
Here are the steps being taken by City departments scheduled for today’s budget hearing:
ADMINISTRATION & FINANCE:
The department has cut personnel costs by 9
percent, or $80,573, since the beginning of 2009, including a 5 percent salary cut for
director-level positions. Two positions were eliminated this year – an assistant Human
Resource director and an Information Technology position. Separate positions for a
license clerk and a receptionist were combined into one, and the position of Assistant
Controller was eliminated, enabling the sharing of a Finance position with the Public
Works department. These changes have led the department to increase cross-training of
staff, but still has impacted the timeliness and volume of reports and projects produced by
the department.
CODE ENFORCEMENT:
Effective January 2009, take-home vehicles were eliminated
for nine inspectors. Also in 2009, the director and three supervisors took a 5 percent
salary reduction. Projected cuts of $205,711 for 2010 represents 9 percent of the
department’s 2008 budget. Most of the additional cuts result from reducing the hours and
some benefits of all secretaries and inspectors in the department from 40-hour weeks to
32-hour weeks. (The reduction includes a 20-percent pay reduction, but employees still
qualify for health benefits.) The department also has cut two secretarial positions and one
part-time position. The department also anticipates reducing costs for demolition of
substandard structures by $35,000 through negotiating a new contract. Increased fees and
new processes also may help the department increase revenue.
COMMUNITY AND ECONOMIC DEVELOPMENT:
When the impact of the tax
caps was evident, this department cut one staff position and left two vacant positions
unfilled. The department also plans to eliminate two additional full-time positions by the
end of 2009, while some employees will begin working 32-hour work weeks in 2010.
The staff reductions will allow the department to consolidate locations, relocating staff
who now work in the Trigon Building, across the street from the County-City Building,
this fall into the County-City Building, saving nearly $80,000 annually. Overall, the
department has cut 13 percent of its budget from 2009 to 2010.
LEGAL:
In 2009, Legal eliminated its paid interns, reallocated some salary costs from
property taxes to management of the City’s self-insurance fund, and reduced other salary
costs. Legal also is examining other salary reductions to reduce 2010 personnel costs by
24 percent when compared with 2009 levels. Some attorney costs will be allocated to
specific projects, rather than to the City’s general fund budget. Compared with Fort
Wayne, Evansville and Gary, South Bend spends less in total legal fees. Although South
Bend direct personnel costs are higher than in those cities, South Bend’s expenses for
outside legal counsel were considerably less, resulting in lower overall legal costs.
The Council’s budget hearings resume at 3:30 p.m. Wednesday, Aug. 5, with a review of
proposed budgets for the Department of Public Works along with its Engineering,
Street/Traffic & Lighting, Central Services, Water and Wastewater/Sewer/Solid Waste
divisions as well as the Morris Performing Arts Center/Palais Royale Ballroom. Also
scheduled:
?3:30 p.m. Aug. 12 – Building, Mayor’s Office, self-insurance funds, capital and
debt funds, Century Center, Clerk, Council
- 30 -