City's 2014 budget: No tax cut and smaller surplus fund - Omaha.com
Published Wednesday, June 26, 2013 at 12:00 am / Updated at 10:43 am
City's 2014 budget: No tax cut and smaller surplus fund

A multimillion-dollar surplus from Omaha's 2012 budget will help close a fiscal gap projected for next year, rather than shore up the cash reserve and golf accounts.

City finance officials made another item clear: A tax cut won't be part of Mayor Jean Stothert's proposed 2014 budget.

The City Council, with a 6-1 vote Tuesday, approved Stothert's request to move $9.3 million from the 2012 books to help balance next year's general fund budget. The remaining $1.2 million from the 2012 surplus will go to the city's contingent liability fund.

Stothert, in a statement, said the council's vote “is an important step towards balancing the budget without a tax increase.”

“We still have work to do,” she said.

During her mayoral campaign, Stothert drew a tough line on government spending and set goals of reducing city property tax rates and eliminating the restaurant tax.

But a Tuesday letter to the council from the city's acting finance director stated that “no levy decrease will be recommended” in next year's budget.

Stothert's use of last year's extra cash differs from what former Mayor Jim Suttle proposed this spring.

In May, Suttle's administration asked the council to place $3 million in the cash reserve fund, $3.5 million in its contingent liability fund and $560,000 in the golf fund. Suttle wanted to send the remaining $3.5 million to the 2014 general fund for basic city operations.

“So asking to transfer $9 million as opposed to the original $3 million is a big ask, but it does seem to have merit,” council President Pete Festersen said during Tuesday's meeting. Suttle had hoped to build up Omaha's savings to help bolster its credit rating.

But Stothert's administration, as it prepares next year's budget, is working to resolve a gap between city departments' proposed budgets and projected revenues that the mayor says is anywhere from $16 million to $20 million.

The new mayor's spending targets for the Parks, Public Works, Fire and Police Departments are close to their current budgets. After Tuesday's council vote, if every department met her targets, Stothert said, the city's 2014 shortfall would be close to $2 million.

The new mayor's proposal for the surplus, acting City Finance Director Al Herink told the council, is needed to “help maintain basic city services.”

The city owes higher-than-expected sales tax refunds for state business tax incentives.

Those payments contribute to the multimillion-dollar shortfall in this year's budget, and that trend is expected to persist next year.

“The new administration does not consider raising taxes as an option for replacing the revenue shortfall caused by future refunds,” Herink wrote in documents submitted to the council. Herink said a tax increase “may have been considered” by Suttle's administration to replace that money next year.

Such transfers are often a routine part of closing the books on a budget year, although council members voiced some skepticism about the amount of cash the mayor requested.

Stothert briefed council leaders on her proposal late Monday. Garry Gernandt, who hadn't been briefed on the proposal, voted against the measure after a failed effort to delay Tuesday's vote.

Festersen said several council members were reluctant to make the larger transfer from what was intended for the cash reserve. But he said they “hope this allows us to maintain basic city services such as keeping our libraries open and possibly adding more police to our streets in 2014.”

Councilwoman Aimee Melton also argued for the transfer.

“I do think that this is something that needs to pass today in order to give the mayor the ability to finalize the budget,” she said. “Any further delay of this could hinder her ability to balance the budget.”

In May, finance officials said the contingent liability fund — the account dedicated to legal settlements and cases in which the city is uninsured or underinsured — should hold a minimum balance of $4 million to $5 million.

The account held roughly $750,000 at the end of last year, officials said in May.

The cash reserve fund, which can be a rainy-day fund for fiscal emergencies, held roughly $4 million at the end of 2012. That fund could have legally held $12.5 million that year, finance officials say.

The golf fund operates seven city golf courses, the Finance Department said last month. Only three of the city's 18-hole courses are actually profitable.

Stothert's plans for next year's budget include a larger police recruit class to bring Police Department staffing to the level it's budgeted for this year. She also wants to lease new cruisers and find a way to fund updated police radio equipment.

Stothert's administration also is grappling with how to pay the Fire Department's expenses this year and next, many of which are mandated by a fire contract that Stothert helped negotiate.

What goes on in teens' heads these days? High school slam poets unlock their secrets on stage
Rather than doing $250K in repairs, owner who lives in lot behind 94-year-old house in Dundee razes it
Kelly: New $24M UNO center embodies spirit of newlywed crash victim
Teen who worked as a cook is killed in shooting at Benson's Gallagher Park
Sweet deal on suite use has MECA board looking at written rules
Finally. Spring expected to return, stick around. No, really: Warmer-than-average weather in forecast
Home alone: When burglar broke in, 12-year-old locked herself in bathroom, called 911
City Council OKs redevelopment plan for north downtown project
Inmate accused of partially tearing off another's testicles charged with assault
Crew working to disassemble International Nutrition plant
Lawyer: Man had right to hand out religious fliers outside Pinnacle Bank Arena
Firefighters put out duplex blaze in N.W. Omaha
Woodmen request would take nearly $40M in valuation from tax rolls
Coffee with a Cop set for Thursday in Benson
In TV ad, Shane Osborn says Ben Sasse 'beholden to Washington'
Douglas County offices accepting credit, debit cards
Ben Sasse raises more money than U.S. Senate foes Shane Osborn and Sid Dinsdale
Parched Omaha soil soaks up record precipitation
Engineering student harnesses girl power, starts engineering-science club at Gomez Elementary
WB Dodge Street lane closed
Ex-Omaha Mayor Hal Daub endorses Shane Osborn for U.S. Senate seat
New Doane College program promises free tuition for first class
No more last-minute hiring of Omaha Public Schools teachers
Database: How much did Medicare pay your doctor?
New public employee pay data: Douglas, Lancaster, Sarpy Counties, plus utilities
< >
COLUMNISTS »
Kelly: New $24M UNO center embodies spirit of newlywed crash victim
Jessica Lutton Bedient was killed by a drunken driver at age 26 in 2010. Thursday, the widowed husband and other family members will gather with others at the University of Nebraska at Omaha to dedicate a permanent memorial to Jessica.
Breaking Brad: What do the moon, Colorado senators have in common?
How about that "blood red" moon Monday? It was as red as the eyes of a Colorado legislator.
Breaking Brad: Hey, Republicans, are you ready to be audited?
A quick list of audit red flags: 3) You fail to sign your return. 2) You fail to report income. 1) You are a registered Republican.
Breaking Brad: Next year, Bo Pelini brings a mountain lion to the spring game
Before the spring game, Bo Pelini carried a cat onto the field. With Bo's personality, it'd have been more appropriate for him to carry a mountain lion.
Breaking Brad: Bo Pelini's cat lets spring game intro go to its head
Coach Bo Pelini took the field before the spring game holding a cat aloft. Typical cat. He was undoubtedly thinking, “Sixty thousand people, all cheering for me!”
Deadline Deal thumbnail
Shoreline Golf Club
$40 for 2 Players, 18 Holes of Golf with Cart ($85 Value)
Buy Now
PHOTO GALLERIES »
< >
SPOTLIGHT »
Omaha World-Herald Contests
Enter for a chance to win great prizes.
OWH Store: Buy photos, books and articles
Buy photos, books and articles
Travel Snaps Photo
Going on Vacation? Take the Omaha World-Herald with you and you could the next Travel Snaps winner.
Click here to donate to Goodfellows
The 2011 Goodfellows fund drive provided holiday meals to nearly 5,000 families and their children, and raised more than $500,000 to help families in crisis year round.
WORLD-HERALD ALERTS »
Want to get World-Herald stories sent directly to your home or work computer? Sign up for Omaha.com's News Alerts and you will receive e-mails with the day's top stories.
Can't find what you need? Click here for site map »