My 28 Specific Budget Reform Suggestions
"Budget Enthusiast"
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There is no such thing as "Government Funded", it's all TAXPAYER FUNDED.
In 2018 I attended and participated in 14 Budget Hearings. This is one of the most important duties of a Councilperson. The City has a budget of over $330,000,000. That may seem like a lot, but a lot of those funds are already committed. We now have over $260,000,000* of debt and we are facing the 2020 Circuit Breaker. The Mayor and Council were supposed to be reducing our debt for the Circuit Breaker, not increasing it.
* The amount will vary as some debt is paid and new debt is added. The Council reviews and votes on the Budget the Mayor presents. It is their duty to make sure it represents our priorities, not rubberstamp it. The Council is a balance of power and safeguard for YOUR TAX DOLLARS. A Council is not supposed to pass a deficit budget. If you look at previous budgets, this has occurred. It's important to keep in mind this Indiana State Code:
"Penalties (IC 6-1.1-18-10) "If proper officers make excessive appropriation they are guilty of malfeasance in office and they are liable for 125% of the excessive appropriation." For more about Budget information from the Department of Local Governtment Finance: https://www.in.gov/dlgf/ 
When the Mayor and Council are working on a Budget, they need to keep in mind:
"A 2% Debt limit is established by the Constitution of the State of Indiana." This is based on the NAV (Net Assessed Value) of the City, which was $2,327,500,241 for 2017. They can't just press the County Assessor to increase property values to make the numbers work. The Assessor uses a strict set of guidelines to determine value using a three point calculation. Do you wonder why...
I could list a lot more. The answer is Poor Priorities, increasing bonds instead of "Pay as you go" and short term planning/spending. This has lead to South Bend having debt over $260,000,000* and tying up resources for at least two decades trying to pay them off. * The amount will vary as some debt is paid and new debt is added. You can read a longer explanation on my "Debt" page. I will also detail how you can look at all of this debt on the State of Indiana website so you can see for yourself. My Participation included:
The Council only gives 3 to 5 minutes for Citizens to give input and ask questions. That isn't enough for me to push for change. I have decided to be more effective I need "a seat at the table", which is why I need YOUR VOTE. |
28 Specific Ideas I Suggested for Change in the Budget Process
24. Do a 10 year amortization chart for all the salary increases over 2%.
25. Top social concerns will have custom financial reports to detail how much is being spent on them so there can be an evaluation on where spending can be increased/decreased:
Note: Although some of these services are combined with the County, both entities need to know hard dollar amounts and adjust accordingly.
26. Top infrastructure and maintenance concerns will have custom financial reports to detail how much is being spent to address the basic services to prioritize what needs to be funded first.
27. Vote on each department budget separately.
28. Examine contract and budget awards for Quid Pro Quo deals.
After infrastructure, social concerns, debt, abatement and TIF issues are reviewed, the Council can let the Administration know how much is available for discretionary "wants" after "needs" are met.
The Council needs to be determining the Budget. They represent the people directly. Although "feel good" PowerPoints are nice for PR, there needs to be an emphasis in looking at ALL the numbers, not just pieces. Council is voting for the Citizens on dollar amounts, not PR.
In spite of both Council and Citizen participation in multiple meetings, the process has a long way to go to be optimal.
As you go into this final round, we hope you will negotiate and work to remedy the following:
Look for yourself at https://gateway.ifionline.org/report_builder/
Choose “Browse Reports”, Choose “Debt Management”, Choose “Debt Comparison Report”
Choose “City/Town”, “All Sources of Repayment”
(Takes awhile to come up) Scroll down to “St. Joseph County – South Bend Civil City”
Principal O wed: $137,315,707 Interest Owed: $31,254,889 Leases: $121,948,778
Total Debt is $290,495,505 which is $2,871.42 PER PERSON Don’t tie up the future!
NOTE: These figures were at the end of 2019. Debt amount changes when some debt is paid and new debt is added.
These are all areas that need Longpath Thinking.
NOTE: As of December 31, 2018 these features were not in place. It looks as if some are being adopted in 2019.
- All budget materials firmly received and posted two weeks in advance.
- Total budget amounts (800+ pages) posted at the opening of the budget process by July 15th of each year. Both Council and Citizens need to see ALL the amounts.
- Creation of a Standing Committee that includes Citizens, open to anyone, not just appointed. It will be overseen by the Council Municipal Budget Auditor. (New position)
- Review of all TIF Districts that detail expenditures and upcoming projects. Other municipalities have useful and clear reporting we can use as a guide here in South Bend.
- Report the total amount of TIF coming off the top of Property Taxes which is now about 35%. Have an understanding of how this puts downward pressure on those in the TIF and an increase of Property Taxes on those outside the TIF. It is not “free”. (Normal recommendation is a TIF area be 10% or less by Indiana Economists.)
- Look at "Porting" in TIF instead of expanding TIF areas and creating more burden.
- Look at ways to reduce the size and time length of existing TIF.
- Review of all Abatements to review progress and if "Claw Back" needs to be invoked. If they didn't reach the requirement for new jobs created, they owe the money back to the taxpayer. Clearly mark which ones are inside a TIF and/or have received TIF monies. NEW jobs really created? #Abatements
- Detailed transactions for the Cash Reserves will be presented and special note for where Bond Proceeds are included as "Cash Income". Aim for at least one year of coverage for each area so the City can easily weather economic downturns and maintain cash reserve for both interest income and bond ratings. #CashReserves
- Review of all Bond transactions and a close look at the current and future Debt Service Loads in the next 10 years. It will also include the length of the Bonds, interest, additional charges and any Capitalized Interest. Any new bond proposal will give the Council at least one month in advance the amortization schedules for both the highest and lowest expected percentages and for both 10 and 20 year time frames. Example: Eddy Street ll --> $25 M bond, $17,724,222 in interest @ 5%, Total Cost $42,724,222 for $25,000,000 of money. This won't be paid off until 2037. #DebtService
- All reports will include totals at the bottom of all columns. Most of the presentation the grand totals were left off making it seem like the Council wasn’t voting on large sums.
- Reports will have all related accounts presented, not just select ones.
- Reports with the State will be kept current. We found there were quite a few reports missing. South Bend needs to stay current with submissions to the DLGF. Ms. Hockenhull, the previous Controller, was given the list of these. #DLGF
- Council and the Standing Budget Committee will receive direct quarterly reports from the DLGF by inviting the representative for this area to meet and take questions.
- The whole Council will review the Annual City Audit, not just the Council President. #Audit
- Provide a breakout list of "Professional Services" with project number, recipient and the amount awarded for the past and current year. This is currently around $18M a year
- Return the "Checkbook" feature to the website to show all those interested who got paid what when. Routing numbers can easily have that column removed before posting.
- Chart of Accounts with all Account Numbers available on the website.
- Remove Deficit spending and truly balance the budget. Unlike the Federal Government, the City cannot print its own money. Choices need to be made. There is also a State Law requiring it to be balanced.
- Those receiving management level pay need to oversee a minimum of six paid positions, not including themselves. There are way too many managers at higher salaries.
- For any new position do an amortization chart for the true cost of that position for the next five years. Add the $16K for benefits, have it increase 2% each year. If the position has training or certifications, add those in as well.
For example a $50K position is really $66K per year + 2% increase making it over $330K for the next 5 years. Three positions just added another million dollars to the salary costs. Realize the PERF also needs to be calculated and will have a long term impact. - List all employees and note if they have a cell phone and/or tablet, vehicle reimbursement. Re-evaluate if this added cost is really necessary for all of them.
- Changing a title and then moving up the salary to match has been a way to give one employee a substantial raise over the others only getting a 2% raise.
24. Do a 10 year amortization chart for all the salary increases over 2%.
25. Top social concerns will have custom financial reports to detail how much is being spent on them so there can be an evaluation on where spending can be increased/decreased:
- Crime - Cost of shootings, morgue costs, proper officer staffing levels
- Homelessness
- Opioid Addiction / Other Addictions
- Hunger
- Health (Lead for example)
- Education Levels (Graduation Rates, outside school ratings)
- Job Levels
Note: Although some of these services are combined with the County, both entities need to know hard dollar amounts and adjust accordingly.
26. Top infrastructure and maintenance concerns will have custom financial reports to detail how much is being spent to address the basic services to prioritize what needs to be funded first.
- Roads (2,220 lane miles)
- Sewers
- Water Treatment
- Lighting
- Curbs and Sidewalks (700 miles)
- Neighborhood conditions
- River Bank Safety
- Maintaining City Buildings and Properties
- Code Enforcement Issues
27. Vote on each department budget separately.
28. Examine contract and budget awards for Quid Pro Quo deals.
After infrastructure, social concerns, debt, abatement and TIF issues are reviewed, the Council can let the Administration know how much is available for discretionary "wants" after "needs" are met.
The Council needs to be determining the Budget. They represent the people directly. Although "feel good" PowerPoints are nice for PR, there needs to be an emphasis in looking at ALL the numbers, not just pieces. Council is voting for the Citizens on dollar amounts, not PR.
In spite of both Council and Citizen participation in multiple meetings, the process has a long way to go to be optimal.
As you go into this final round, we hope you will negotiate and work to remedy the following:
- $8M+ needed to repair roads
- Address the $2M Deficit in the PERF
- Looking at the TIF’s and why River West and other TIF’s are below Reserve amounts
- On the River West TIF Bond #135 there was Capitalized Interest of $1,429,996 added to it due to not paying on it for the first 2.5 years. Why was $1.4M added to the burden of taxpayers?
- Debt Service Load - $43M in one year isn’t sustainable
- Consider only adding the Community Outreach person in the Fire Department and a Council Municipal Budget Auditor , realizing adding more people is not possible with current deficits
- Get out your red pens and cut things since the State of Indiana says our debt is $260M+.
Look for yourself at https://gateway.ifionline.org/report_builder/
Choose “Browse Reports”, Choose “Debt Management”, Choose “Debt Comparison Report”
Choose “City/Town”, “All Sources of Repayment”
(Takes awhile to come up) Scroll down to “St. Joseph County – South Bend Civil City”
Principal O wed: $137,315,707 Interest Owed: $31,254,889 Leases: $121,948,778
Total Debt is $290,495,505 which is $2,871.42 PER PERSON Don’t tie up the future!
NOTE: These figures were at the end of 2019. Debt amount changes when some debt is paid and new debt is added.
These are all areas that need Longpath Thinking.
NOTE: As of December 31, 2018 these features were not in place. It looks as if some are being adopted in 2019.
As you can see, I have:
I need YOUR VOTE to be more effective for YOU.
If you want to learn more, please read my other pages. It is my goal as an Advocate to involve YOU in the process.
My campaign is a grassroots one. Donations are appreciated and helpful. Thank you!
- Been attending Council meetings for over 3 years
- Participating in the Budget Hearings as a Citizen Advocate
- Have given careful thought as to how things can be made BETTER
I need YOUR VOTE to be more effective for YOU.
If you want to learn more, please read my other pages. It is my goal as an Advocate to involve YOU in the process.
My campaign is a grassroots one. Donations are appreciated and helpful. Thank you!
NOTE: My donation app is by ActBlue. Your receipts will come from them.
