08-17-04 Personnel & Finance - Laserfiche WebLink

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r [ Cn p ommit ,ez cRE,20'Lt of ti2E n ti 2z / /j ,p �E'L3onnEL and 9inanaE eommitttE of tl2E�Outil BEncl £?ommo eOuna that the budget as proposed adequately funds projects; provides raises for employees; addresses cash reserves; and permits the city to invest in ongoing initiatives. "Strong fiscal health" describes the state of the city's finances. New revenue sources developed over the years have helped,along with COIT monies and wheel tax revenues. There have also been one-time distributions. Challenges include the rate of growth and growth of expenditures especially in the public safety sector. Challenges also include the uncertainty of the reassessment process. $6 million in back taxes have not been collected and once they are they will be placed into a reserve account and reduce the tax rate in future years. Reducing the cap on levy growth will also be a challenge with all of these putting a"pinch on capital budgets". Mayor Luecke concluded his remarks by stating that choices will have to be made together. Mayor Luecke then called upon City Controller,Rick 011ett,to provide further fiscal information to the Committee. Mr. 011ett stated that he would be happy to sit down with the Council at any time. The proposed budget is"balanced and fiscally responsible" and he then highlighted a variety of projects. He noted that the city is in a better condition than the national, state and several local areas; however there are escalating pension and insurance costs. Mr. 011ett stated that the proposed budget permits the city to address the primary goals of the City Administration's theme of"We're Building South Bend"by addressing: Smart Growth, Safe City and Clean City initiatives. The budget will be the"key evaluation tool"and addresses all operating and debt services with capital requests being addressed early next year. The budget "addresses 69 departments". A 5%maximum was permitted in the past with 4.4%being the maximum under a new formula based on growth determined by Local Government Finance, with this resulting in a reduction of$350,000 to$500,000. The formula has a maximum cap of 6%. 76%of the budget addresses needs related to public safety with this amount not including capital or pension expenses. Public safety is the city's highest priority. Pension costs will be $10.5 million with an additional $ 2 million annually for cars and vehicles.. Mr. 011ett noted that the merit bonus program will be reduced by 2/3's. The Deferred Retirement Option Plan(DROP)front loads pension costs and it is anticipated that more will participate in DROP. The budget will reflect a loss of three(3)full-time employees. He noted that it also calls for two(2)additional members are requested to be added to the Board of Public Safety. Approximately$2 million is expected from wheel taxes. Spending guidelines requested a zero increase in supplies and a zero increase in other services with gasoline and natural gas being exempted. The city is locked into a 12-month contract now which is based on a therm rate. In response to a question from Council Member Dieter,Mr. 011ett stated that the city is reviewing its vehicle inventory and is aware of his inquiry to Matt Chlebowski,Director of Central Services.. A presentation will be given on insurance,noting that in the 1st 26 weeks of this year claims are significantly below last year's. There were eleven(11) seriously ill employees in Personnel and Finance Committee Meeting of August 17,2004 Page 2