City of Lincoln to hold steady on the 2022 Property Tax Levy

 

[December 26, 2022] 

On the Monday, December 19th voting session of the Lincoln City Council, after much debate and a split vote the majority ruled in favor of keeping the city of Lincoln’s share of the 2022 Property Tax levy level with the 2021 levy.

The original recommendation by City Treasurer Chuck Conzo was to increase dollar amount of the levy by one percent. This would increase the total dollar amount of the property tax levy from $1,820,604 to $1,839,555. Wrapped into the ordinance to be passed was also the General Obligation Bond payment. Conzo said the estimate discussed in the committee of the whole meeting was $180,000 was going to be slightly less at $179,024.

The motion was made to approve Conzo’s recommendation with an immediate motion to amend brought forward by aldermen Rick Hoefle and seconded by Tony Zurkammer.

Hoefle said the Lincoln residents have had some hardships in the last year, including an exaggerated rate of inflation that was impacting cost of living for every constituent.

Sam Downs said that he had done some investigating on the rate increase Conzo proposed and on the average the one percent increase in the dollar amount would have a small impact on property owners, only about $5 per year.

Hoefle said indeed what the city was looking at was a small amount, but there was a domino effect that played into the scenario. He said there were other taxing bodies that would see that the city was asking for more money, and they too would ask for more. In the end, the impact on property owners in the city would be much larger than the $5 Downs was talking about.

Downs said he was concerned about the city’s commitment to the pension funds and noted that the city is not close to where it should be in covering its obligations. Hoefle said he really wanted someone to show him that was a fact. He added that he would also like to know if the city of Lincoln is the only one that is short on pension funding.

Steve Parrott asked Conzo to comment on whether or not the city is short on its obligation. At that moment, Conzo did not get the time to comment, as Zurkammer was waiting his turn to speak. He said he objected to the pensions being used as an excuse to raise the tax levy. He agreed with Hoefle saying the inflation rate was at a 40-year high.
 

When Conzo was given the floor, he answered Parrott saying that the city is at less than 50 percent of where it should be in the pension fund balance. In response the Hoefle’s comment that he hadn’t seen evidence the city is behind; Conzo said the city’s deficit was reported each year in June in the required annual report of the city. He said the report always includes the fact that the city is underfunded in the pension plans.

Conzo went on to say that he didn’t believe the domino effect was a viable excuse for not raising taxes. He said that the city has held taxes level in the past, and those other taxing bodies went right ahead and raised theirs. Those bodies do not count on the city of Lincoln to take the lead on what they all should do.

The city of Lincoln along with all other municipalities in the state is required by state law to have the pension programs 90 percent funded by the year 2040.

Wanda Lee Rohlfs asked what the consequences would be if the city did not comply. Conzo said he didn’t know, but there was sure to be something. He said his best guess was that the state would tell the city that that it had to pay so much per payroll into the retirement funds and the city would have no choice and probably no control over the amount the state decided upon.

Rohlfs then asked how the lack of increase would impact the city coffers. Conzo said that without the increase, the city would need to take $125,000 out of the general fund and place it in the pension fund, just to meet the payouts to city retirees for the coming year.

The first vote to be taken was on the amendment made by Hoefle. The amendment to hold the tax level with the exception of the payment to the General Obligation Bond which would remain at the actual dollar amount of the payment originally presented by Conzo.

Conzo said that keeping the tax flat with the GO Bond included in the motion would result in the city taking less than needed for the upcoming payment. He said the money taken for the bond last year was $177,480 and what was needed for the next payment was $179,024.
 

Hoefle re-amended his motion to state that the city would hold the tax levy level but increase the levy for the GO Bond to the correct amount needed, $179,024.

The vote was split with five voting in favor and three against. Those that voted in favor of the amendment included Kevin Batman, Hoefle, Kathy Horn, Rob Jones and Zurkammer. Those opposing the motion included Downs, Parrott and Rohlfs.

The second vote was to approve the original motion “as amended.” Again it was a split vote with the same five voting yes and the other three voting no.

While the topic of the property tax levy was concluded, the issue of the pensions did come up later in the evening when Conzo was presenting his monthly report on the financial standing of the city. Again he brought up the fact that the pensions are underfunded, and additional comments were made by aldermen.

Among those comments, Parrott said he understood the issue was that the state is requiring the pension funds be 90 percent funded by the year 2040. He said that this is an issue that the city must address sooner rather than later.

Bateman said he wasn’t all that concerned about the pensions because the state is also behind on its funding. He said that as 2040 approaches, the state will change the rules.

Conzo said yes, it is possible even probable that the state will change the rules. But that change could be a mandated percentage of the total payroll paid to the pensions. The city would no longer have options and it would have to do what it is told, when it is told.

The treasurer’s report was concluded, and City Clerk Peggy Bateman offered her sewer revenue report saying only one prison had paid in the past month and only $6,704. Kevin Bateman said it was case in point that the state can’t pay its bills, so how can they demand that the city’s fund the pensions.

Parrott said the point was he didn’t want to see the city employees who have put themselves in harms way for the citizens to not be able to draw their pensions. He said there must be a plan.

Hoefle offered up one last comment saying that the bottom line is that those who are drawing pensions from the city are getting their money.

Conzo had the last word and perhaps the quote of the day when he said, “They are getting their pensions, but that approach is like the guy that jumps off a twenty-story building and gets just past the third floor and says everything’s fine so far.”

The bottom line is the county clerk will be requested to levy $1,820,604 plus $179,024 on the upcoming property tax bills. How these amounts impact individual property owners will depend on the assessment of the property by the county assessor’s office.

[Nila Smith]