HomeMy WebLinkAbout07-28-09 Council to consider priorities to retain in 2010 budget
Office of the Mayor
NEWS RELEASE
July 28, 2009
5 p.m.
Council to consider priorities to retain in 2010 budget
Contact:
Mikki Dobski, Director of Communications & Special Projects, 235-5855 or 876-1564
The South Bend Common Council begins a series of hearings today on the City’s
proposed 2010 budget, facing the challenge of continuing existing services with a
projected decline of $6 million to $8 million in revenue.
With the recent adoption of an increase to St. Joseph County’s Local Option Income Tax,
the projected revenue loss isn’t as steep as the $22 million to $24 million cut that would
have taken effect as a result of the state’s cap on property taxes (fully implemented in
2010). Increases in the county’s Economic Development Income Tax, along with
imposition of new property tax replacement credits and a public safety tax, will raise a
projected $16 million in revenue.
First, Mayor Stephen J. Luecke has instructed City departments, with three exceptions, to
submit budgets that reflect the more dramatic cuts proposed before passage of the Local
Option Income Tax. This will enable the Council and the City administration to select
which services to restore with the additional revenue anticipated from the increased
county taxes. City Controller Catherine Fanello said the proposed cuts announced for
2010 represented a decrease of nearly $12 million when compared with the 2009 budget.
Leaders of the Police, Fire and Parks & Recreation departments were instructed to make
recommendations for restoring some of the cuts originally proposed for their services and
programs. Based on projected increased revenue from the new public safety tax, the
Police Department will add $2 million back into its proposed budget, while the Fire
Department will restore $3 million. In anticipation of additional revenue in the Parks
General Fund, the Parks & Recreation Department will restore about $900,000 in funds.
The Common Council will review proposed budgets for those departments at 3:30 p.m.
Wednesday, July 29.Other departmental budgets before the Council, however, will
reflect the full impact of what originally was to be a 27 percent cut in revenues citywide.
Second, the mayor is proposing several cuts that will take place citywide:
?As in 2009, there will be no pay raises in 2010 for non-bargaining employees.
?The City will make changes in the application of its health plan, eliminating a
$500 contribution to a flexible medical spending account for each City employee
($600,000 savings) and going to an 80-20 health insurance plan ($1.3 million
savings).
?Continued reduction in the number of take-home vehicles issued to employees. In
2009, the City reduced its fleet and heavy equipment by 50 vehicles, including 15
take-home cars.
Third, work on the 2010 budget builds on budget reductions already made for the current
2009 fiscal year. In anticipation of the tax caps, City departments spent frugally in 2008,
saving more than $4 million, which was applied to the 2009 budget. In addition, City
officials approved more than $3.1 million in permanent cuts for 2009. All cuts made in
2009 will remain in effect. They include a voluntary 5 percent salary reduction for the
Mayor, department heads and most directors. In addition, all employees in the Mayor’s
Office and the Legal Department will take 5 percent pay cuts. Positions left vacant in
2009 will remain unfilled in 2010, while several programs that were eliminated in 2009
will not be restored, including:
?Assistance to social programs
?Efforts that encouraged 50-50 cost-sharing in curb and sidewalk improvements
?The Commercial Corridor program, which enhanced the City’s primary entryways
?After-school programs
?Support for the Healthy Communities and the Workforce Diversity initiatives.
Fourth, in light of the property tax caps, the delay in distributing tax bills and the
slumping global economy, City officials say it is far more difficult than usual to
accurately projected revenue from property taxes and other sources. In fact, all income
tax-based revenue is expected to drop in 2011 because those receipts lag 18 months
behind the year in which they are certified.
“I recommend that we begin with the extensive cuts proposed by all City departments and
deliberate as a Common Council, City administration and a community regarding the
services that are most essential to preserve,” Luecke said. “In these uncertain times, we
than can proceed with prudence to ensure that we have the resources for the services we
must have and the flexibility to respond to emerging needs and opportunities.”
This is the schedule of budget hearings before the Common Council:
?5 p.m. Tuesday, July 28 – Budget overview
?3:30 p.m. Wednesday, July 29 – Police, 911, police pension, Fire, EMS, fire
pension, and Parks & Recreation
?3:30 p.m. Aug. 3 – Community and Economic Development, parking garages,
Code Enforcement, Legal, Administration & Finance
?3:30 p.m. Aug. 5 – Public Works, Engineering, Street/Traffic & Lighting, Central
Services, Water, Wastewater/Sewer/Solid Waste, Morris Performing Arts
Center/Palais Royale Ballroom
?3:30 p.m. Aug. 12 – Building, Mayor’s Office, self-insurance funds, capital and
debt funds, Century Center, Clerk, Council
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