02-11-19 Council Minutes - Laserfiche WebLink

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REGULAR MEETING February 11, 2019 The good news is over the last four (4) or five (5) years, there were actually some years where it actually went down from the previous year. The overall trend across that trend is one (1) of pretty modest growth and is almost in line with inflation which is extraordinary when you consider how much faster healthcare grows than the inflation rate normally. How did that happen? Certainly, a big part of it has to do with the work that the City has done to reduce claim liability through things like the wellness program, the clinic and continuing to have really good work with our partners who help manage our claims process to really be sure we are making the most to prevent expensive plans. Now, we are self-insured, so, a single and very complicated medical case by one (1) employee would be something you might notice on the budget the next year, but the overall trend was bent, and we will need to bend it further to help beat that fiscal curb we are all worried about. Mayor Pete went on, I don't want to prolong the address by reciting everything, but I wanted to enter into the record a sense of the things that are really commanding a lot of our resources in 2019. I also would like to point to how a lot of these are investments that pay off in the long run. The Paramedicine Program deals with extremely expensive cases where we are making hospital runs where a simple visit to someone before it became an emergency might have headed that off. The investment in lead and the return on investment on a child not being lead poisoned is financially as well as morally very compelling. You will continue to see a number of different efforts and initiatives. Some have bigger dollar signs than others but all of them are investments in the quality of life and I look forward to describing them further in the State of the City. Mayor Pete continued, So,how are we doing against the fiscal curb? The fact is that there will be a sunset in 2020 on South Bend, St. Joseph County's status as an exception to the rule that allowed us to have fifty(50) extra basis points on our property tax caps. The latest numbers suggest we are at about a$2 million drop expected in revenue from property tax levies in 2020 compared to 2019. Again, these are only estimates, but that is what we think we are seeing. It is a substantial number but not a terrifying number because we've been getting ready for it for the last couple of years. Having said that, it will necessitate more tough choices in the 2020 budget that we are already beginning to picture that we will be bringing before the Council this fall. This (referencing a table in the presentation) is what happens if nothing changes. So, we try to create our best estimate of what we call business as usual. So, if everything grew the way it's growing, and we didn't do any belt tightening and didn't take any unusual measures, by definition we estimate that the 2019 budget will perfectly balance. Obviously,that won't quite happen. If we are conservative enough, expenditures will actually be lower but that's what we put into the book. Then you see the costs grow where the deficit is. $6 million next year, it grows to $8 million, then swells closer to $10 million before contracting due partly to debt beginning to roll offline. Mayor Pete went on, So, there are some issues with operations that need to be funded in a more sustainable way. In particular, we've really relied on Medicaid reimbursements to fund some of our EMS Operations and we are not sure that those will be as reliable as they have been in the past. Again, the biggest thing we spend on is personnel. So, wages, insurance and health care costs do continue to drive that. What are we going to do about it so that we don't see that big gap? First (1St),again, we will continue to really focus on keeping those healthcare costs low. That will allow us to continue beating the nationwide trend. Secondly, it continues to be the position of this Administration that our tax assessments need to be more accurate. We've seen some work and some movement on the part of the County Assessor that we think is addressing that, at least partially. This is not about everybody being higher or lower. This is about the fact that our bottom line gets better when the assessments are more accurate for the simple reason that is you're over assessed,you appeal and if you're under assessed,you keep it to yourself and we never even knew there was more money. I'm a little reluctant to use the terminology freeze, but we are looking at a soft hiring freeze. What I mean by this is that any time somebody leaves a position, we are going to take a hard look at that position and it will be required to come all the way up to the Mayor's Office before we sign off on replacing that person. If we see the need is there, we will continue filling that position because that position's intent was in the budget and the idea of us asking you to authorize that budget for us, it's obvious that position matters, but we aren't going to replace a position just because. If we realize there is another way to cover down on that position during this belt tightening period, we are going to pause and see if that work can be handled in another way. 16