|
REGULAR MEETING February 11, 2019
<br /> Mayor Pete went on, One(1)thing that I appreciate having foregrounded that our new Controller,
<br /> Dan Parker,thought was important for the Council to see is our capital asset profile. So,basically,
<br /> this is everything the City owns. It has depreciated into a Net Book Value. So, if we were to, I
<br /> guess, go on eBay and offer to sell every pipe,lane mile of street, every snowplow, everything that
<br /> has been capitalized by the City, it comes to approximately $468 million in value. A really
<br /> important number to balance that against is the average use of the life because,of course,the longer
<br /> the life of our infrastructure, the less we have to spend in order to replace the amount of that Net
<br /> Book Value. That has varied over the years and this isn't as wild a fluctuation as it looks like
<br /> because the access is not zero (0) but this is just to give you a sense of teasing out those ups and
<br /> downs. But,basically,it has been increasing and we think that's a good thing. This is basically the
<br /> payoff when you make investments. The downside to it is you have to spend money on it to pay-
<br /> off as you increase the useful life of the capital you do have.
<br /> Mayor Pete continued, Onto the revenue and expenditures, from an operational perspective, again,
<br /> sorry this(referencing a table in a slide of the presentation) is such an eye chart. Let me invite you
<br /> to concentrate on a couple of things. One (1) would be the total revenue and total expenditures
<br /> numbers. These will fluctuate to some extent based on the addition or subtraction of a bond. So,
<br /> sometimes it looks like we are spending a whole bunch and we have this huge amount of revenue
<br /> but it really just means a bond came in, leading to a lot of cash, or, because we are doing cash
<br /> accounting, a capital investment that may be designed to last thirty (30) years, shows up on our
<br /> books just that one (1) particular year. The one (1) thing, of course, we always do keep an eye on
<br /> is this General Fund level. The General Fund, by law, has to be balanced every year and as you
<br /> can see, the expenditures are trending upward but upward at a level that is not that far out of line
<br /> with inflation. Revenue exceeded expenditures in all major funds last year which is a sign of
<br /> conservative budgeting and healthy revenue. When it comes to property tax collections, again,
<br /> generally we've seen it on the rise. You do see for 2019 it looks a little lower than 2018, we are
<br /> hoping this is just a matter of budget conservatism because 2018 is actual and 2019 is budgeted.
<br /> The DLGF,the State department that gives us these estimates,they are always pretty conservative.
<br /> The good news is we saw quite a bump, if you look at 2018 versus 2017, more than we expected
<br /> between$3 million and $4 million in additional property tax revenue. For those of us who believe
<br /> that the total asset base of the City may be a little bit undervalued in terms of its assessment, we
<br /> would hope to see that shore up over time. So, hopefully the actuals come in a little bit ahead of
<br /> that.
<br /> Mayor Pete went on, Income tax, I would like to caution here. It's been great to see this increase.
<br /> That is definitely part of how we've made the books add up over the last few years. I just want to
<br /> caution that you can't count on this the way you count on property tax revenue. Property values
<br /> are pretty stable. This really depends on how the economy is doing. So, as long as we're in
<br /> recovery, as we've been for the better part of this decade,we can expect this to continue growing.
<br /> The moment there is a downturn,this will soften up and we need to remember that in our financial
<br /> planning.As a quick reminder of the employment of City personnel,we are officially at 1,098 full-
<br /> time employees. Fully half of our full-time employees are in public safety:Police and Fire.Another
<br /> quarter is Public Works and the balance is pretty much everything else. Venues, Parks & Arts
<br /> swells to be one (1) of the very largest departments in the City but that is because of the part-time
<br /> and seasonal workers in the summer months. The full-time number is quite a bit lower. The last
<br /> eighth of the pie is the rest of us. We as a City have quite a bit fewer full-time employees than we
<br /> did,and we will never, I suspect,have the number that we did prior to the property tax caps kicking
<br /> in during Mayor Luecke's Administration during that 2008 and 2009 period. I will say that these
<br /> numbers can sometimes be a tad misleading. When, for example, the Potawatomi Zoo goes from
<br /> being City owned and operated to having public private partnership taking them off the City's
<br /> books, we are still sometimes funding those employees. Bottom line is, with that being said, we
<br /> are holding the line on City workforce. It is in line with the American economy that, because of
<br /> technology, an individual worker is more productive than before. So, we can do the same job with
<br /> fewer people.
<br /> Mayor Pete continued, I'm very pleased to show you this slide(referencing the presentation). One
<br /> (1) of the biggest things that was a concern for us, and I think is a concern for any organization
<br /> where your biggest expense is personnel is the dramatic increase in health care costs over the years.
<br /> Just between 2010 and 2014 it went up about fifty percent(50%)in terms of a per employee basis.
<br /> 15
<br />
|