09-22-08 Common Council Minutes - Laserfiche WebLink

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REGULAR MEETING SEPTEMBER 22, 2008 Councilmember White made a motion to combine these bills for purposes of Public Hearing. Councilmember Oliver Davis seconded the motion which carried by a voice vote of nine (9) ayes. Councilmember LaFountain, Chairperson, Personnel and Finance Committee reported that this committee held a public hearing on these bills this afternoon and voted to send them to the full Council with favorable recommendation. th Mayor Stephen Luecke, 14 Floor County-City Building, 227 W. Jefferson Blvd., South Bend, Indiana, made the presentation for these bills. Mayor Luecke thanked everyone for all the hours that were put in over the summer in budget committee hearings to look at not only a base line budget for 2009 but also a potential spending plans for 2009 and 2010 that will become clearer as they get more information about the impact of House Enrolled Act (HEA) 1001. As the City awaits understanding the full impact of that act, he is submitted this proposed base line 2009 budget. This base line budget is formulated upon the anticipated receipt of the full revenue that enabled South Bend’s 67.3 million dollar general fund budget in 2008. In the wake of the property tax caps the City will not receive the full revenue that it has historically depended on to provide basic services of Public Safety, Parks and Recreation, Neighborhood Revitalization and Infrastructure Investment. That is why he asked Departments to develop spending plans for 2009 and 2010 that will outline how the City will live within our means if revenue reductions of more than 27% are fully realized by the year 2010. Until all of the issues related to the changing revenue picture are resolved, he urged the Council to pass this base line budget. This budget provides the City with maximum flexibility and continuing the services on which the residents and businesses depend. If new sources of revenue are found this base line budget will enable the City to continue providing services at essentially the same level as in 2008. If there are no additional revenue sources 2009, they will return to the Council with a reduced appropriation that will reflect a spending plan outlined during this summer’s budget presentations. He stated that he looks forward to working in partnership with the Council to continue looking for ways to continue these vital services to the residents as the Nation faces troubled economic times and local governments in Indiana face new uncertainty in their ability to fund those services. He stated that he is asking for approval of the base line budget at a time when there continues to be a void of information. He stated that they do not know what the certified assessed value is for the City of South Bend, they do not have a certified tax rate not only for 2009 but 2008 yet. He stated that they do not know what property taxes they will receive in 2008. All of that complicates the picture, so given that they have decided to present this baseline budget for the Council consideration and approval. th Catherine Fanello, City Controller, 12 Floor County-City Building, South Bend, Indiana Ms. Fanello advised that this coming budget year is very different and uncertain in light of the property tax reform passed by the Indiana General Assembly. Departments were asked to create a baseline budget and create a proposed spending plan to reduce the budget by $18.2 million over the next 2 years. She noted that the spending plans were discussed during the summer Personnel & Finance committee hearings and that they need further discussion before being adopted in 2009. She noted that levy growth is calculated by the Department of Local Government Finance (DLGF). The allowed levy growth for 2009 is 4.0% compared to 3.7% in 2008. Ms. Fanello stated that budget assumptions for 2009 are a 96% collection rate and using 2007 assed values since 2008 assed values are still unknown. The history of city property tax rates for the last four years are in 2006 the rate was $2.1795 with a 3.1% growth and a 3.2% inflation rate; 2007 $2.1046, -3.4% and 2.8%; 2008 $2.1800 (est.) 3.00% 5.4% (August) and 2009 $2.2500 (est.) 3.21% and an unknown inflation rate. She noted that in 2009 estimated levy budgeted is General Fund $52,174,381; Park Fund $8,804,427; Police Pension $1,392,498; Fire Pension $1,567,740; Cumulative Capital Development $1,160,880 for a total of $65,099,926. She noted that the 2008 Project Levy (budgeted) General Fund $52,245,227; Park Fund $8,816,382; Police Pension $1,449,805; Fire Pension $1,632,663; Cumulative Capital Development $1,162,456 for a total of $65,306,533. The 2009 Decrease in Budgeted 15