09-11-06 Council Meeting Minutes

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REGULAR MEETING SEPTEMBER 11, 2006 that have been held. There has been good dialogue back and forth, excellent questions being raised. It has been a good opportunity for Department Heads to meet and hear the concerns of the Council. He also thanked his department heads and the management team for the hard work that they have done to put this budget together and for the excellent work that they do day in and day out, managing the operations of the City of South Bend and of course to the front line workers who perform all of those services that are provided. Mayor Luecke gave a special word of thanks to the City Controller Catherine Fanello and Tom Skarbek for their work in the budgetary process. Mayor Luecke stated that these three bills present the operating budget for 2007. Bill 55- 06 deals with budget for the Enterprise Funds, Utilities, Building Department, Parking Garage, Project Releaf, and Century Center. Bill 56-06 is the other departments within the City of South Bend, General Fund, Parks, Street Department, Community and Economic Development, Capital and Debts Service, Police & Fire Department Pension Funds. Bill 57-06 sets the rate of property taxation for the City of South Bend. A rate of 2.9999 for the property tax and a separate Redevelopment Tax Rate of .0536. These rates do not become final, the Council needs to approve before budgets can be submitted to the Department of Local Government Finance, which does a review and after they certify the assessed value that the City receives from the County as well as certified the budgets that were presented, they will actually set a final tax rate, which generally is lower than what is advertised here. The 2007 operating budget that has been submitted is a solid budget, which keeps the City of South Bend fiscally sound, while continuing to provide essential services and maintain needed reserves in the general fund. It allows for raised for Police, Fire, Teamsters and supplemental pays for other employees in the City of South . This budget does continue the City’s effort to deliver services more efficiently and it begins to make some of the structural changes needed to meet upcoming challenges. The bar has been raised every year to continue to make progress in cost effective delivery of services. The City will continue to do this, so that we are not suddenly faced with draconian changes or cuts, that have been seen in some other units of governments across the state. Since 2002, we have reduced total personnel by 75 positions, most of those through attrition. But there are challenges, slowly growth in the property tax revenue compounded by the circuit breaker legislation. Mayor Luecke stated that he will be actively lobbying the legislature for property tax relief and flexible revenue sources to support local government. The Indiana Association of Cities and Towns has put together a legislative package called Hometown Matters, which provides local government with the opportunity to develop revenue streams that are appropriate to each City or County, so that they can fund the services that are needed. He will be lobbying very hard for those issues in the coming legislative session. The City also faces challenges with reduction in the motor vehicle highway fund and other distributions. The local option income taxes have been pretty much flat lining the last few years. The hopes of improvement in the economy and new jobs that are being brought into this community will allow those to begin to grow in the next few years. Currently they are looking at a flat lining of those. Pension costs continue to be a strain on the budget, in 2007, the drop program for the Police and Fire Department will cost 3.5 million dollars. To meet that obligation they will be transferring 2.6 million from the general fund which then requires a transfer of 1.1 million from the raining day fund into the general fund to create a balanced budget in the general fund. PERF contributions for non-uniform employees are up 22%. Utility costs have been rising; gasoline costs have been much higher. It is estimated that it will cost an additional $500,000 for gasoline next year. Asphalt costs have also risen, 35 % this year. Health care costs continue to rise though with changes that has been made in the Health Care Program, they have been able to diminish the rate of increase in the health care costs and look to continue to find additional ways to provide employees with appropriate health care, but also to try to hold down that pressure on the budget. This budget meets these challenges through creative management, but also through some painful decisions. Reduced head count, since 2002 by 75 positions, the drop from 2006 to 2007 is 25 positions. The Code Enforcement cleaning crew has folded into solid waste operations, which will mean the elimination of five positions in that crew. The City is also looking for other ways to be more efficient and more effective, looking to centralize mowing efforts, so that they can provide that service more effectively. They are reviewing take home cars, not in the Police Department, but among the other departments, to make sure car that are assigned for take home, are actually needed in that way. They are also looking at the Central Stores operations. The 5