The 2013 proposed budget has a $65M gap between projected revenue and expenses. Revenue is down due to declines in income and property taxes. Fixed costs are increasing for items like fuel, pensions, and healthcare. The budget proposes closing the gap through reopening public safety contracts, eliminating the local homestead tax credit, using reserves, and seeking TIF reimbursements. Key areas of the budget include funding public safety at 85% of the general fund, and providing flat funding to other departments while implementing cost savings measures.

1. 2013 Proposed Budget
Presentation
Presented to local media outlets
August 13, 2012

2. 2013 Budget Summary
• Approximately $65M gap between revenue and
projected base expenses
• Revenue is down
– Income tax down by $48 million from peak in 2010
– Property tax revenue decline of $10 million from 2012
• Fixed costs increasing
– Increased fuel costs
– 3% state mandated increase in pension contributions
– 7% increase in healthcare costs

3. Tax Revenue
Indianapolis/Marion County
$500
$450
$400
$350
$300
$250 Property Tax
$200 Income Tax
$150
$100
$50
$0
2007 2008 2009 2010 2011 2012 2013
In millions

4. 2013 Proposed Budget
• City-County General Fund appropriation of $595M
– 2012 General Fund appropriation was $569M
– Approximately 2/3 of General Fund increase dedicated to IMPD, IFD and Sheriff’s Department
– Does not include DPW, DMD or DCE
• Flat base budget for all departments and agencies
– Base funded at 2012 levels plus increases for costs of healthcare, pensions, and fixed costs
– Marion County Sheriff budgeted at 100% of his request
• 8% increase from 2012 General Fund allocation
– All agencies took $20M base cut in 2012
• $3M budgeted for merit based pay for performance civilian raises
– Raises range from 0 to 3%
– Does not impact union members
• No use of Citizens Energy, Rebuild Indy or Fiscal Stability Fund dollars

5. Closing the $65M Gap
• Reopen IMPD and IFD Contracts: $5.5M
• Eliminate local homestead tax credit: $8.1M
• Utilize $20M in City/County fund balances
• Utilize $17M from Rainy Day Fund
• Seek $10M reimbursement from TIF Districts

6. Public Safety
• Public Safety/Criminal Justice represents 85% of General
Fund
• IMPD and IFD have received 14% cumulative salary increases
since 2008
– 2008 3%
Despite the
– 2009 4% recession
– 2010 5%
– 2011 flat
– 2012 1%
• 2013 Public Safety Budget includes:
– Implement fuel surcharge for take-home vehicles
– Fund of Crime Prevention Grants at 100% of 2012 ($2 million)

7. Local Homestead Credit
• Unnecessary in property tax cap era
– No impact on homes already at 1% cap
• State eliminated similar state-funded credit
• City pays $13M to provide homeowners only
$4.5M in tax relief
• Average impact of $24 per year on homes not at
1% cap

8. Other Budget Notes
• Arts grants funded at 2012 level ($1M)
• Mayor’s Office Budget
– $500K net increase in charges paid for ISA and OCC services and
charges recovered for Mayor’s Action Center (MAC)
– Personnel budget increased $270K
• Increased healthcare and pension costs
• Added Mayor’s Neighborhood Liaison to Mayor’s Office (from DMD)
• Moved Minority and Women Business Development to separate
department
• 3% contracted increase for AFCSME members funded
– Primarily DPW (SnowForce, pothole, and parks maintenance crews)
contained within existing budget

9. IMPD Budget
• IMPD General Fund budgeted at approximately $187M
– 5% increase from 2012 budget of $177.8M
– Does not include grant dollars or capital funds
• 3% contracted raise saves $3.2M
• Reassigned 20 officers from administrative to field duty
• Lateral hiring to fill vacancies and maintain force size
• Fuel Surcharge generates $1.4M
– Surcharge equals cost of one tank of gas (current $51/month)
– Surcharge rate slides based on gas prices
– Use of vehicle for part-time doubles surcharge
– Vehicle use limited to Marion County or I-465 perimeter
• Non-budgeted additional saving opportunities
– Restructuring of non-merit ranks/positions
– Reduction in overtime
– Consolidate training, academy, property room, etc

10. IFD Budget
• IFD General Fund budgeted at $139M
– 3% increase from 2012 budget of $135M
– Does not include grants and capital funds
• 3% contracted raise saves $2.2M
• Local 416 is working with City to close gap
– Transfer administrative positions to field to reduce overtime
• Non-budgeted additional saving opportunities
– Restructuring of non-merit ranks/positions
– Reduction in overtime

11. Sheriff’s Dept Budget
• Sheriff Department budget at $109.2M
– 8% increase in general fund allocation
– 2012 total budget appropriation is $101.8M
• Increased budget for Jail II operations
• Increased budget for inmate/arrestee medical care
• Fully funded Deputy Sheriff pension obligations

12. Looking Ahead to 2014
• Projecting $20M recovery in income tax revenue
• Office of Audit and Performance charged with
finding additional $15M in efficiencies
• $13M remaining in Rainy Day Fund
• $80M in Fiscal Stability Fund
• Flat base spending projected from 2013 to 2014

13. Looking Ahead to 2014
Projected Indianapolis/Marion County Tax Revenue
$400
$350
$300
$250
$200 Property Tax
Income Tax
$150
$100
$50
$0
2013 2014 2015 2016 2017 2018
In Millions

14. Q&A