10-27-08 Common Council Minutes - Laserfiche WebLink

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REGULAR MEETING OCTOBER 27, 2008 Councilmember Puzzello made a motion to reconsider Bill Nos. 58-08; 59-08 and 60-08 to allow for Public Hearing. Councilmember Oliver Davis seconded the motion which carried by a voice vote of eight (8) ayes. Councilmember Oliver Davis made a motion to combine Bill Nos. 58-08; 59-08 and 60- 08 for purposes of Public Hearing. Councilmember LaFountain seconded the motion which carried by a voice vote of eight (8) ayes. th Mayor Stephen Luecke, 14 Floor County-City Building, 227 W. Jefferson Blvd., South th Bend, Indiana, and Catherine Fanello, City Controller, 12 Floor County-City Building, 227 W. Jefferson Blvd., South Bend, Indiana, made the presentation for these bills. Mayor Luecke advised that due to an advertising error in Administration & Finance, the 2009 budget must be heard again for Public Hearing. Catherine Fanello, City Controller gave an update on local statistics. Unemployment 6.8% as of September 2008 compared to 4.4% as of September 2007. She noted that they will have to see the effect on income tax distributions in future. She noted food prices up 6.1% as of September 2008 as compare to September 2007, and the overall consumer price index up 4.9 % in September 2008 as compared to September 2007. She noted that the Circuit Breaker affects only 3 funds: General, Park and Cumulative Capital Development, but it puts pressure on other funds to try and cover costs such as income tax funds. She stated that income tax dollars not budgeted for 2009 are $3.4 million. She stated that the caps will be phased in beginning in 2009 homeowner’s 1.5% in 2009 and 1.0% in 2010; Rental Property 2.5% in 2009 and 2.0% in 2010 and Business 3.5% in 2009 and 3.0% in 2010. She noted that the percentages are based upon grossed assessed value. She noted income tax revenue history in 2008 at an estimate by the Department of Local Government Finance the estimated Revenue is $6,266,381 and subject to fluctuation during economic ups and downs. She noted that income tax funds have been mainly used for capital & debt expenditures and not salaries/benefits that have compounding effects. The fund does not grow fast enough to keep up with compounding salaries/benefit costs. The 2009 Budget Compared to 2008 (Adopted) Citywide in 2009 $180,474,617 and in 2008 $187,225,253; General Fund $67,225,547 in 2009 and $67,300,000 in 2008; Park Fund $11,841,678 and $12,676,555 in 2008. Budget have been dept at or below 2008 adopted budgets. She noted that the 2009 Budget General Fund for Public Safety is $51.6 m or 76.8%; Engineering Streets $6.20 or 9.2%; Code Enforcement $2.32 or 3.4%; General Government $4.44 or 6.6%; Arts/Culture $1.69 or 2.5%; Community & Economic Development $.98 or 1.5% for a total of $67.23 million. The 2009 Budget for Salaries and Benefits Citywide are $95.48 million or 53%; General Fund $52.69 million or 78.4% and Parks $7.74 million or 65.3%. Health Insurance Costs Citywide are $9.8 million; General Fund $5.9 million; and Park Fund $918,523. Ms. Fanello noted that the City currently contributes between 85% and 87%. She stated that reducing the budget often equals cutting personnel and benefits. She stated that they are currently looking at four (4) day workweeks (32 hours) for non-bargaining personnel in General Fund could save approximately $950,000 if a 32-hour work week was implemented. This option will not work for all departments and is not an option the majority of employees can live with. They need 40 hour work weeks to sustain their households. They have also looked at an increase in employee share of health insurance and layoffs. She stated that in the 2009 budget the City must maintain debt obligations. Continue to identify costs that can be reduced outside of personnel/benefits. She further noted that updates to the Council on cost reductions that take place over the next couple of months will be prepared in early January. She stated that they are still looking at the City’s cell phone and take home car policy. They will be working to extend current tax warrants or issue new warrants in anticipation that any significant revenue won’t be received by December 31, 2008. In 2005, the City paid $179,300 in interest; 2006, $84,747 and in 2007 $376,928 for a total over a 3 year period of $640,975. She noted that she would like to be able to have that back. Ms. Fanello noted that departments will continue to work to provide further cost detail of department activities/services. They will verify cost of activity/service and examine how each activity fits within Mayor and Council priorities and goals. They will review performance based budget material to provide answers and further detail. She stated what is next? They need 2008 tax rates 19