HomeMy WebLinkAbout08-05-09 Public Works finds new efficiencies, revenue streams
Office of the Mayor
NEWS RELEASE
August 5, 2009
3:30 p.m.
Public Works finds new efficiencies, revenue streams
Contact:
Mikki Dobski, Director of Communications & Special Projects, 235-5855 or 876-1564
Two revenue-generating departments for the City of South Bend are finding new efficiencies,
targeted reductions and income from sources other than property taxes as a way to help the City
live within its means in its proposed 2010 budget.
The South Bend Common Council on Wednesday reviewed proposed 2010 budgets for five
divisions of the Department of Public Works – Engineering; Street, Traffic and Lighting; Central
Services; Water Works; and Environmental Services (Wastewater, Sewer and Solid Waste) –
along with the Morris Performing Arts Center and the Palais Royale Ballroom.
In terms of all funding sources, the Department of Public Works accounts for nearly 34 percent
of all City expenditures. Total Public Works expenditures from all sources is projected at $56.9
million in 2010, down nearly 16 percent from its $67.3 million expenditure budget in 2009.
But with several divisions supported by user fees and other taxes, the department’s expenses
represent only 12 percent of the property-tax-supported General Fund budget in 2010, for
engineering and streets. That portion will decline nearly 25 percent from $6,566,177 in 2009 to
$4,934,804 in 2010.
The primary reductions to the general fund budget result from a shift in personnel and expenses
to alternate funding sources, including the Motor Vehicle Highway Fund and the Sewage Works
operations and management budget. This will enable 2010 budget reductions of 7 percent by the
street department and of 42 percent by the Division of Engineering. But there are also traditional
reductions, such as removing 25 fleet vehicles throughout Public Works, which seeks to reduce
the entire fleet by 25 percent. Gasoline costs will decline by 7 cents per gallon through a decision
to use fuel with 10 percent ethanol.
But Public Works crews also are finding new efficiencies.
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The street department recently participated with other units of government in a cooperative
purchase of road salt with the State of Indiana, buying a large quantity of salt at $54.67 per ton,
compared with market prices reaching $150 per ton. In addition, South Bend crews installed
liquid salt brine-making equipment to dramatically increase its effectiveness. Where 1 ton of
rock salt covers 4 miles of street, that same amount of salt, when converted to brine,
accomplishes the same results for 19 miles of streets – a nearly fivefold increase. The savings is
further compounded in the means of application – salt brine is applied proactively ahead of
storms during “straight-time pay” periods. Road salt is applied on overtime pay during storms.
The department also is turning to technology to improve efficiency and reduce costs in large and
small ways. The City is in the second year of a 10-year contract during which it expects to save
nearly $2 million from converting incandescent traffic signals to low-energy LEDs. But
sometimes improved service is the primary result. The Division of Water Works will reduce
telephone costs in its operations by 75 percent through converting 17 leased lines to a radio/fiber
optic SCADA system. The Environmental Services division is using a digital sewer camera
during routine maintenance to diagnose potential sewer backups for homeowners from root
masses invading sewer laterals. Homeowners will receive warning letters when cleaning is
needed on the private portion of the lateral.
“This is one of the ways we are instilling a culture of proactive solutions in the City of South
Bend to better serve our residents,” said Gary Gilot, director of public works.
The Common Council also reviewed the proposed 2010 budget for the Morris Performing Arts
Center and the Palais Royale Ballroom, two revenue-generating facilities for the City of South
Bend. The proposed $1,326,222 budget for 2010 represents a 13 percent decrease from 2009.
“The Morris essentially ‘borrows’ operating funds from the City of South Bend and then returns
money to the City throughout the year. From events held in the theater, the Morris returns
revenue earned from facility rent, equipment rental, box-office services, and commissions earned
on food-and-beverage sales and show-merchandise sales,” said Dennis J. Andres, executive
director. “The Palais Royale returns revenue earned from facility rent, equipment rental, and
commissions earned on food-and-beverage sales.”
Cost savings came from cuts in two personnel – a receptionist and sales/event associate – a 5
percent salary reduction for Andres, an end to the City’s payment of a health-care flex benefit
and through contracts that were renegotiated or eliminated.
A 2007 study showed that the landmark facilities have a $5.9-million indirect economic impact
on downtown South Bend through activities such as dining, lodging, transportation, souvenirs
and other expenditures.
In addition, the Morris and Palais generate revenue from parking fees while contributing to
bookings of nearly 1,500 hotel rooms, from which Hotel-Motel tax receipts support Century
Center and the College Football Hall of Fame. Other events organized by Morris staff, like the
Fridays by the Fountain concert series, are funded through sponsorships at no cost to taxpayers.
Budget hearings will resume at 3:30 p.m. Wednesday with proposed 2010 budgets for Building,
Mayor’s Office, self-insurance funds, capital and debt funds, Century Center, Clerk and the
Common Council.
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