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•CITYOF SOUTH BEND OFFICE OF THE CLERK
<br /> to talk about the 2019 budget and to see where they're at, what's working, what they would have
<br /> done differently, and then we'll actually kick off the 2020 budget hearings in July of this year.
<br /> Committee Chair White proceeded to give the floor to the presenters.
<br /> Overview of the City's Debt and Current Reserves—Daniel Parker, City Controller
<br /> Daniel Parker, City Controller for the City of South Bend with offices located on the 12th floor of
<br /> the County City Building, stated, Thank you guys. This is a great topic. I really appreciate the
<br /> whole educational budget series,particularly today's topic because what we're going to talk about
<br /> today is cash reserves and debt, and those are things that are a little bit different than what we
<br /> normally talk about in the budget process. What I wanted to do first (1) (referencing a slide in a
<br /> presentation which is available in the City Clerk's Office) is to throw up what we consider to be
<br /> sort of our, when we do our financial analysis,the things that we look at. Really our four(4)main
<br /> areas, and there are other things we look at especially under each of these four(4) areas,but within
<br /> the four (4) major domains that we look at, these are kind of the things we look at on a daily,
<br /> monthly, yearly basis to make sure the City's financial position continues to be strong. Within the
<br /> budget process, or the traditional budget process without these educational budget sessions, most
<br /> of the time we are talking about this area all the way in the lower right corner(referencing a slide
<br /> in the presentation), the revenues and the expenditures. We spend most of our time talking about
<br /> how much money we are going to bring in and how much money we have to pay out, which is
<br /> great, it is very important, and it drives a lot of these other areas,but that's only one(1) component
<br /> of the City's fiscal decisions. Particularly in my position and speaking for the entire Admin and
<br /> Finance Department,we spend a lot of our time,we spend a lot of our time dealing with operations,
<br /> but,we spend a lot of our time focusing on the balance-sheet side of our fiscal operations,meaning
<br /> our assets and our liabilities.
<br /> He continued, So, if you look at these other three (3) areas on here, liquidity means our cash
<br /> reserves, so liquid assets. What can we actually liquidate in the liquidity reserves? Also meaning
<br /> cash we have in the bank and investments we make. We'll talk a little bit about that today in terms
<br /> of our cash reserves. Debt is our primary liability. So, what do we have out there outstanding in
<br /> debt? What do we owe? What kinds of obligations do we have? We'll talk through that. Capital
<br /> assets, we're not going to get into as much today, but the reason why it is such an important
<br /> component of our overall fiscal analysis is when we look at our future obligations, they may not
<br /> necessarily be things that we've already entered into, but things that are going to come down the
<br /> line. We need to take a look at how our capital assets are maturing,how we are going to be able to
<br /> repair,replace and maintain them over the next thirty(30), forty(40), and fifty(50)years. So that's
<br /> an area that we are definitely looking more and more at. How do we develop asset replacement
<br /> schedules? We want to make sure that we know as assets come to be repaired and replaced, we
<br /> know that ahead of time and can prepare for that financially. So, we're not goingto talk as much
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<br /> about capital assets today but are definitely going to hit on the top two (2): liquidity and net.
<br /> He went on, So, moving into liquidity, again, this (referencing a slide in the presentation) is
<br /> representing our cash assets, primarily. Cash assets and our investments. When we look at cash-
<br /> on-hand, I think a lot of you have seen this chart before, this is total cash-on-hand as of the end of
<br /> the year for the past ten (10) years. It ends in 2018 and I didn't put year-to-date 2019 on here just
<br /> because the way our cash flow works, it might be a little bit misleading. As of the end of April, so
<br /> everyone's aware, as of the end of April, our cash position was about $260 million. The reason
<br /> EXCELLENCE I ACCOUNTABILITY INNOVATION INCLUSION I EMPOWERMENT
<br /> 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD 574.235.5567 www.southbendin.gov
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