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.,CITY OF SOUTH BEND OFFICE OF THE CLERK
<br /> why that's a little bit lower than the $288 million you see on there is that we get property tax
<br /> income twice a year in June and December. So, we are going to get another influx of property
<br /> taxes here in June which will sort of replenish some of the cash that we've seen go down since the
<br /> beginning of the year.
<br /> Committee Chair White asked, So that's normal?
<br /> Mr. Parker replied, It is normal. Every year we see it goes down,it goes back up as we get property
<br /> taxes, then it goes down and goes back up in December. Those are normal spikes as we get the
<br /> property tax distribution from the County.
<br /> He continued, What we see here at the $288 million at the end of the year 2018, that does not
<br /> include restricted cash. So, there is cash that we have that is held in trustee accounts. Mainly, that
<br /> is cash from bond issuances that we've done. So, we issue a bond, get the proceeds in, it is held in
<br /> a trustee account, used for only a very specific capital project, generally. That is not included in
<br /> that $288 million there. So, this is the total cash-on-hand as of the end of the year. As I said, this
<br /> includes cash and our investments. The majority of that $288 million, about $185 million of it is
<br /> in investments.The other$100 million or so is in cash in the bank.That investment policy decision
<br /> is actually here before Council through the Board of Finance, which meets once a year. Are there
<br /> any questions with our cash balance as it stands today?
<br /> Committee Chair White opened the floor to questions from Committee and Council Members
<br /> regarding the cash-on-hand. There were none.
<br /> Mr. Parker continued, One(1) of the biggest questions that I get, so that$288 million sounds like
<br /> a lot of money, what does it actually mean for us from an operational perspective? So, one (1) of
<br /> the ways you can look at this is how does that $288 million compare to our annual expenditures?
<br /> So, we have, right now for our 2019 budget, our annual expenditures total $368 million. That's
<br /> what the 2019 original budget was, $368 million dollars. So, our cash-on-hand, cash and
<br /> investments of$288 million is about seventy-eight percent (78%) of that. What I did is I went
<br /> through Indiana's Gateway website and looked at where other cities stand relative to South Bend
<br /> and the cash that they have on-hand and their annual expenditures. As you can see (referencing a
<br /> slide in the presentation), we kind of are in the top half. And this, to me, is really the sweet spot of
<br /> where I would want South Bend to be; not at the top, I don't want to be at the top, the reason you
<br /> don't want to be at the top is because what that means to me is you're keeping too much cash on
<br /> hand. You're not using it enough to invest in priorities and infrastructure and all the priorities that
<br /> you have as a City. You certainly don't want to be at the bottom of this list either, though. Because
<br /> what that means if you're at the bottom of this list is either you're currently going through fiscal
<br /> challenges, which some of the cities towards the bottom of the list are currently going through
<br /> fiscal challenges; property values declining, income declining, that kind of thing. Or, particularly
<br /> when you look at a city like Carmel, they may not be going through fiscal challenges currently,
<br /> but if they were to experience a downturn economically and property values were to stagnate, or
<br /> incomes were to go down, they might be in trouble from a perspective of being able to meet their
<br /> debt covenants, being able to continue to finance the services they provide historically. So, to me,
<br /> South Bend is kind of right in the sweet spot of the list of cities in Indiana. We potentially could
<br /> even afford to spend down just a little bit.
<br /> EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT
<br /> 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 111)574.235 5567 www.southbendin.gov
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