LETTER FROM JOHN FRIEND CPA CONCERNING THE PROPOSED 2016 CITY BUDGET

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As I told John Martin and 14 news, in 2013 we collected 86% of the budget revenues in the General Fund and 88% in 2014 and my projections for 2015 have not changed.  We will miss the revenues projections in the General Fund by at least by $15 million dollars and it could go up to $17 million if Russ Lloyd doesn’t pull the advancement trick from City Utility funds again.

My meeting with Pete Buttagieg, Mayor of South Bend has indicated their budget calls for an increase in Health Care of 20% and we have only 3.68% projected increase.  It’s NOT unreasonable to believe under the current climate in Health Care that our increase will be 10% or more.  If it is only 8% the quantitative miss in the budget would be $1 million dollars.  If it turns out to 10% would be, of course it will be around $2 million.  WHAT CONCERNS THE HELL OUT OF ME is WE HAVE NO RESERVES TO FALL BACK ON!!!!  Sometimes I feel we have been annexed by D.C. in our line of thinking.

I have dissected this budget thoroughly and have notices some reductions.  However, I wonder why has the Police Department 2016 budget increased by 3.12% while the Fire Dept was increased by 1.21%.?  The differential between both Departments approximately equal to $5.9 million dollars which is 75% of the shortfall in the GF (3.12-.1.21 x 31m).  Comprehensively,  the spending plan should have started with a flat line budget and proceeded with definite reductions in non-essential line items.  Since the elimination of permitting IDEM and the EPA, the local EPA Department  budget should be in the balance.  Missy Mosby brought up reduction in the Council’s legal expenditures, maybe we need to review that.  We also need to talk about the elimination or partial reduction of the City Council’s Health Care coverage. If so, I would be willing to support at least a 50% coverage ratio.

Of course, we have a daunting task ahead of us considering that after three years of over spending, our overall cash balances have declined by 30% and after this year, the number will be 45%.  We must have a combined Civil City cash balance to assure that we can make it to the next property tax installment.  After this year, we may be $17 million from our projections if we don’t excise some financial control and responsibility. This current rate of decline may prove that we have very dark days ahead of us.

Of course, this kind of reporting is NOT popular. If we don’t face the facts that the Winnecke Administration is grossly over estimating revenue and systematically overlooking oncoming increases in operational costs. Finally,  just before a past employee left the Controller’s office, he strongly urged that the Administration cut $18 million from the budget over the next 18 months.  He suggestion was made over 20 months ago and apparently hasn’t been done so far.  Ironically, the operational deficits have been averaging 675-700k per month.

Sincerely

John Friend, CPA
5th Ward City Council member

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13 COMMENTS

  1. Perhaps we need to consider dropping IN after Evansville replacing with DC. My health care coverage increased by 22% and my neighbors by 19%. What in the hell is Winnecke thinking. Maybe his approach to this style of budgeting is just saying, “we will have revenue at ?” the ? is the number to fool the people that his budget is balanced. Of course, we have the Nimrod Weaver who believes that Santa Lloyd’s budget is just okkie dokkie. What levels of financial irresponsibility can we expect out of Weaver should this community decide to re-elect this bozo together with Santa LLoyd.

  2. Please write this letter to the c/p, or request an editorial column. The uninformed mass needs a wake-up call.

  3. It appears that every morning Winnecke is troubled deciding what to wear. Should I dress in my gray’s or blue’s or perhaps my Santa’s outfit? Unfortunately, it sure appears that the RED suit has been the choice especially in this election year. Just realized the true meaning behind Winnecke’s name, “Win-a-Key” i.e. donate to old LW and you will be presented with the “Key” and the key is not to the City but the Treasury.

  4. Friend’s comment about the Health Care cost raising by more than 4% is valid. Especially considering that the budget process starts at June 30, 2015 and the Hospitalization Fund is NEGATIVE by 1.5 million. So, Mr. Winnecke you will have to make good on the overdraft plus the anticipated increases above 4%. This number will be the death nail of this budget as presented. BTW, the hospitalization fund at June 30, 2014 was a POSITIVE 1.9 MILLION. These people are drinking the Kool-Aid.

    • Wait just a moment! We were told health costs were going to DECREASE with the passing of Obamacare. Now we are hearing about 20% increases. What’s up with that? We’re we lied to?

  5. Mr. Friend was on City Council the entire Weinzapfel administration, correct? Approved the Ford Center, the demo of Roberts, the tacit approval to let the McCurdy and Mesker Park amphitheater dissolve into ruin, gave his blessing when fire trucks literally had their brakes falling off during runs due to neglected maintenance and there was an attempt to close fire stations (had nothing to do with trying to save money for crony projects, of course…), also was strangely silent during the last few budget cycles when Mayor Winnecke was evidently spending us into oblivion. Suddenly he isn’t running for City Council and he is a paradigm of fiscal responsibility, and the One Good Man sounding a budgetary alarm? What crap. I would say I trust him about as far as I can throw an elephant, but I could probably throw the elephant further…

    • This is the 3rd year that Friend has been sounding the alarm on the budget. The difference under Weinzapfel is that Weinzapfel did not spend more than he took in. You may not have agreed with how he spent it, but it wasn’t over spending.

      • Only difference in weinzapfel and winnecke is their names
        neither are worth a poo as a mayor , they have both been doing what they want and don’t give a rats ass about the tax payer that can barely make ends meet
        Many people did not want a stadium downtown and to have Roberts destroyed
        Same scenario with meskers amphitheater , but politicos are afraid of the competition
        so we’re gonna let it rot ,now to tear it down

      • With respect, I think your last sentence is debateable. Technically, I suppose that if I max out my credit card I haven’t ‘spent more than I take in’. After all, I can make the monthly payments, and the total due isn’t going to be called for at once. If I max out 5 credit cards? Suddenly becomes an issue of overspending.

        I’m not slobbering Winnicke supporter, but it seems like he took office with a few strikes already against him (fiscally, at least). Exhibit A, debt incurred by the construction of the Ford Center. Exhibit B, something having to be done about the shell of Robert’s Stadium (which was arguably unsalvageable by the time he took office due to neglect by Weinzapfel), which morphed into the heretofore unfunded Roberts Park (of which I am an unabashed supporter). Exhibit C, a combined sewer disaster which finally came due on his watch after decades of getting kicked down the road by previous administrations. Exhibit D, a field of weed-infested dirt by Central Library which was supposed to be a hotel, another legacy of the Ford Center.

        Understand that I’m not saying Winnicke is faultless in his spending priorities, far from it. However, for Friend to have sat by, nodding his head and grinning while all the above happened, only to change his tune completely within the last few years? Bollocks.

    • Who’s been writing the checks, the council or the mayor???? and by the way, the only two council members that rode Weinzapfel’s ass was Dan McGinn and John Friend. And it was John Friend that demand both the IT Assessment which our current vendor makes 28k net per week and the audit on the Ford Center. And, was Friend the budget director that held up the hotel and saved the taxpayes 18.5 million . . rallied support on council to cut 12 million out of the Johnson Control Budget but your Boy failed to protect the homeowners from the damage caused by the replacement of the meters. Voted against Earthcare. So, saved us 18.5 m on the hotel, 12 million on the Johnson Controls, and 10 million when Friend forced Weinnzapfel to drop Key Benefits on the health insurance and once Weinzapfel was out of office, Winnecke went directly back to Key. The tally is 41 million.

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