City to pass budget that's in the black

[April 17, 2007]  Governments have been hit just like private households with increasing costs in recent years. After 9/11, insurance rates went through the roof. Last year's gasoline hikes were felt particularly hard in departments with vehicles that are either on the road many hours or consume large quantities of fuel, such as police, fire, ambulance and streets department services. That continues to be costly. Added to that is this year's electricity deregulation.

Streetlights for the city of Lincoln were $14,000 last year. The streets department superintendent, Tracy Jackson, anticipates that this year's bill will be $120,000, but to be safe he budgeted $150,000. This figure doesn't include the streets department building or anything else.

Aldermen, Mayor Davis and department heads met for a third and final time Saturday morning to work on the 2007-2008 fiscal year budget, which begins May 1. What began as a $700,000 deficit is now set to be $35,376 in the black and could be more with any luck.

Some luck had already come the city's way just between budget meetings. The new insurance consultant was able to help find lower-cost insurance policies for the city. The new commercial insurance will cost $231,952. This saves over $80,000 from the general fund and a little savings from some other funds as well, according to the city clerk, Melanie Riggs.

At Monday evening's meeting, Larry Bielema from Callender and Co. in Peoria said that the policy savings for the area of police and public officials and for workers' compensation had some to do with the right time, some hungry new markets out there and some to do with the city. He complimented the city, saying, "Whatever you're doing, you do well. That reflects on insurance costs."

Before starting Saturday morning's meeting, Verl Prather, in his fourth year as finance chair, said, "I talked to the mayor when I first started, and we agreed we were never going to pass an imbalanced budget. We haven't yet and we're not going to."

He then said that he had a plan, and something had come to the city clerk that morning also, so there were two options.

We're trying to leave a sufficient amount for projects for next year in a 0.5 percent non-home-rule sales tax fund to end next year with $307,500, he said. A portion of that can be taken out, but I don't really want to do that, he said. Another option is just simply to eliminate one of our street projects this year.

Riggs said that there is less than $5,000 left to pay for phase one of the Sysco project, and together with phase two, the total amount that will be paid out is $1,324,924. However, the state will pay $775,928 reimbursement, and there will be a $300,000 transfer made now from the non-home-rule fund for those streets.

This brought the deficit for the budget to $267,965.

Initially two street projects were budgeted: Omaha at $200,000 and Sherman at $250,000. It was decided to go ahead with the Sherman Street work, as that bonding work has a time limit of July 2008, and put off Omaha Street for a year.

Plotner suggested that another savings could be realized by outright purchasing rather than leasing two police vehicles and renting a third. The rough estimate would see a savings of $31,000.

Another savings that could be seen during the year is if the electricity rate were to go back to where it was.

Dave Kitzmiller of EMC shared some information about some anticipated future savings at the sewer plant. They will begin saving energy on some of the motors through the use of some new capacitors on the motors. EMC is investing in a three-year project in purchasing the capacitors at a total of $185,000.

The motors are only 70 percent efficient, and the electricity is metered coming in. The unused 30 percent of the electricity is returned to the electric company but not credited. The capacitors store that energy and are guaranteed to save 15 percent of that electricity; representing $60,000 a year in savings. They also extend the life of the motor. After they are paid for, it will mean a savings in energy for the city.

EMC has tried but was unable to bundle enough customers together to qualify to purchase electricity wholesale.

What EMC has decided to do is to prepare a contract for the city of Lincoln to pre-sign when the market price drops low enough, and they will be able to sign that day. These rates change hourly, Kitzmiller said. The city could see as much as 10 percent savings this way, he said.

Mayor Beth Davis thanked Prather, the committee, aldermen and the department heads for their work on the budget and for keeping end-of-year spending down, "That makes a difference," she said.

Monday's meeting was adjourned to April 24 so the council can vote to accept the proposed budget.

[]