07-13-09 Common Council Minutes - Laserfiche WebLink

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REGULAR MEETING JULY 13, 2009 the city is proposing in the cuts that have been mentioned is how the city feels that they can live within that budget. He stated that as much as he would like, he cannot leave any department untouched, because each department will be impacted by the loss of revenue. He stated that to look at a reality check, just look at the City of Muncie, where the Mayor there had to lay off forty (40) firefighters because of the caps and loss of revenue to those caps for the City of Muncie. He stated that he has met with Mayor’s all across the State, and all are looking at reductions in force, laying employees off and finding ways to deal with the significant lost of revenue in their budgets. In terms of the TIF Districts, they generate dollars that the city captures to spur economic development in the community. He stated that they have had great success with that such as downtown, and in the airport industrial area. He stated that by expanding the airport area, they are now able to do some additional investment on the Westside in LaSalle Square; Studebaker Corridor; and Ignition Park. The dollars generated there are meant to reinvest in those areas, to bring jobs and to bring growth to the community. He stated that they intend to continue to do that because they think that is a big part of how ultimately long term the city can solve this $22 million dollar shortfall that the city will be experiencing. He stated that the City has allocated $1.2 million dollars from the Airport TIF to pay on the bond issue to pay for the new headquarters for the police and fire departments. Those are dollars that now do not have to be taken out of the general fund or out of COIT or EDIT’s existing dollars and freeze up dollars to help the city maintain staffing in general fund positions and park & recreation positions. TIF Districts themselves are suffering a loss of revenue because of the property tax caps so as all those are factored into play, the TIF’s are contributing to resolving the issue before the City, but there are important investments that the City needs to continue to make in those TIF Districts to attract new jobs to the community. He stated that in terms of the Rainy Day Fund and the reserves that have been built up are good business practice. It is important to have reserves, it’s critical for cash flow issues. He stated that as the Council is well aware in a good year, the City sees the property tax distributions twice a year, once in spring and once in fall, and needs to make payroll in between those times those reserves allow the city to meet it’s ongoing cash flow needs. Rainy Day funds are set aside for specific purpose and that is to be able to be available in the case of an emergency. Such as if a Tornado should strike the City of South Bend or if there were to be some horrific outbreak in the city and would have some extraordinary costs, the city would have the dollars available to do that. The Rainy Day Fund has been used because of the particularly late distributions of property tax and economic development taxes and other taxes that support the city’s revenues. Mayor Luecke stated that he is not really proposing those monies be used to reduce the $22 million dollar shortfall. Councilmember Oliver Davis asked if the City has looked into privatizing some services? Mayor Luecke stated that he had looked at privatizing as an opportunity and explore on a case by case basis, then make what he feels is the best decision for the customers. In some instances they have privatized services, with the management of Century Center; a private firm was hired to run Century Center. In terms of Solid Waste Collection it was decided years ago to provide that service and still believes that the value that the customer and the City received from hiring their own employees and using City equipment is a much better value for the customers as opposed to bidding out for those services. He stated that the City of Mishawaka just bid out their trash service and South Bend’s rates are very competitive with those. Councilmember Oliver Davis asked Mayor Luecke about take homes and how does that benefit the City? Mayor Luecke stated that the cars that were owned were sold, some cars were leased and were moved down the fleet and replaced an older aging vehicle that would have needed a new lease. Basically, the City is reducing the number of vehicles in its inventory. He stated that there is more work to be done in this area. He stated that they are continuing to look at whittling down the numbers in the fleet and will make progress over the next year. 14