 At the beginning of the 8 a.m. meeting, Alderwoman Melody Anderson,
who chairs the finance committee for the city, and Les Plotner, city
treasurer, dropped the bomb on the council.
They were projecting that they were approximately $635,000 short
of being able to balance the budget for the coming year.
The group spent about five hours Saturday and another 90 minutes
Thursday night cutting, moving and rearranging city expenditures,
and when they were finished it came down to a net shortfall of
approximately $83,000.
It was a small chunk of change compared with where they began
last week, and they do have a solution, if city employees and the
unions they belong to will make just a few concessions.
On Saturday the group had come to realize that the health
insurance program offered to city employees is what Alderwoman Marty
Neitzel referred to as a "Cadillac" plan.
In the plan, the employee pays no portion of the premium; the
city bears all that cost. In addition, the insurance policy comes
with a minimal deductible and very little out-of-pocket expense for
the employee.
Anderson said Thursday night that if the policies could be
amended to include a $500 deductible and a 20 percent co-pay, the
annual savings to the city would wipe out the deficit.
Anderson and Mayor Keith Snyder have met with the police union
and said that while the union didn't comment on any of the
suggestions they had for saving the city money, they also didn't
seem to be openly opposed.
There has also been a meeting with the streets and alleys
department, and those employees voiced a willingness to do what it
takes to help out.
During discussions with some of the employees, it came out that
many of them have not added their families to their policies because
that is too expensive.
Anderson said that if this could end up being the solution for
the city, it could also end up being of benefit to the employees, as
they have to pay the family portion themselves, and changing the
policy might make it more affordable for them.
Raising the deductible on the health plans is the city's first
choice of actions to resolve their deficit.
However, they have also talked about other options. It was
discussed whether or not the employees might be willing to pay a
portion of the monthly premiums. If yes, then the policies wouldn't
have to be changed.
The group figured that if the employees paid $85 a month, the
city could save approximately $95,000 on health insurance.
Another option discussed, which is among the least desirable, is
to mandate unpaid furlough days. Snyder said that eight furlough
days per employee per year would also solve the deficit.
However, in some cases a furlough day could make things worse.
For example, the fire department is currently logging an enormous
number of overtime hours. Chief Kent Hulett cut deep into his
overtime budget this year, and he said that furloughs could have an
effect on that overtime.
Another idea to save money was to ask the employees to forgo
their raises this year. Anderson said that those she heard from on
the topic were willing to consider it, but they wanted their raises
back in a coming year. In other words, no raise in 2010-11 could
equate to a double raise in 2011-12. Anderson said there was no way
the city could promise that, because there is no way of knowing how
long it will take for the city to recover from the money crunch they
are experiencing now.
In the end the council agreed that altering the health plan was
the best option. Between now and Tuesday night, all four unions that
represent city workers will be contacted and proposals will be made.
Alderman Jeff Hoinacki said that all the options the city has
discussed need to be shared with the unions so they can decide which
is best for their employees. He said this didn't have to be a
unified decision; one group may go with one option and another go a
different route altogether.
How the deficit went from $635,000 to only $83,000
The $83,000 was the tail end of the big problem. At the Saturday
meeting and again on Thursday night, there was a lot of cutting of
expenses and moving of money involved to knock the deficit down to
that amount.
On Saturday the council spent hours going through each department
budget and trimming fat out of expenses. They started with looking
at miscellaneous expenditures such as supplies, dues and
subscriptions, trainings and such, then moved on to some bigger
ticket items like reducing funding for sidewalk repairs and
streetlights.
They also talked about eliminating some part-time clerical staff
and doing away with funding to Main Street Lincoln and regional
planning.
Money for derelict structure demolition went to the wayside as
did funding for a citywide cleanup project.
In the end the part-time clerical position in City Hall was
saved, and Main Street was awarded a reduced amount, as was regional
planning.
Main Street had requested $15,000, plus $2,500 for the Christmas
parade. Thursday night it was decided that the city would make a
one-time contribution of $12,500 to the organization. Snyder
commented that if they wanted to set the $2,500 aside for the
parade, they could, but if they needed it for daily running of the
office, that would be at their discretion.
The city's contribution to regional planning was raised last year
from $15,000 to $17,500. For the 2010-11 year the city will cut that
amount back to the original $15,000 figure.
By the end of the Saturday meeting, the council had knocked the
net deficit down to the $400,000 range.
Renewal of the general obligation bond knocks off another
$193,000
Since the Saturday meeting, Plotner has talked with Kevin Heid of
First MidState about the city's general obligation bond. MidState is
the underwriter of the bond, and Heid has offered some help on what
the money can be used for.
The bond itself is best compared to a revolving loan on a
four-year cycle. This fall the bond will be paid off, and it can
once again be renewed in December. The bond will add approximately
$615,000 to the city coffers. However, that money, like most of the
funds that come into the city, can only be used for certain
purposes.
Plotner said that he and Heid had talked about what can be taken
out of the city's general funds and applied to the new bond.
Included in the list of allowable expenditures is anything
pertaining to infrastructure and road repair, and capital expenses.
[to top of second column]
 |
Plotner said that he had gone through every page of
the budget and tagged the capital expenses. He had come up with a
total of $193,000 that could be paid with the general obligation
funds.
He added that he was going to talk to Heid again
about the annual loan payments for the city's latest fire truck as
well as the annual payment on the City Hall roof project.
The rub on using the general obligation bond is that
the money will not be available to the city until probably January.
If the city has to make certain payments before then, it may cause a
bit of a squeeze on their cash flow.
Motor fuel tax absorbs $107,000 of the deficit
Jackson and city engineer Mark Mathon had also spent
time since Saturday talking to the state of Illinois regarding the
motor fuel tax revenues the city receives.
Again, there are restrictions on how that money can
be spent, but they wanted to try to get some of the street and alley
expenditures tagged as motor fuel tax expenditures.
As the council began to gather for the 5 p.m.
meeting Thursday, Mathon still had no answer. But then at 5 on the
dot his cell phone rang and the answer was, "Yes, you can move some
of those expenses."
With that permission, Mathon and Jackson explained
that in the general operating expenses for lighting and the street
and alley department, there is $107,000 that can be moved out of the
general operating budget and into the motor fuel tax expenditures.
This brought the city down to the $83,000 difference
that they will turn to the city employees and their unions to help
them resolve.
Possibilities of new money:
--Hotel-motel tax
In addition to all the cuts and moving of money, the
city also discussed and decided to pursue a hotel-motel tax levy.
Snyder had introduced the idea on Saturday, saying
that the tax charged currently at local motels and hotels was less
than what is charged in nearby cities. He said that a 1 percent levy
or even a 2 percent would put Lincoln in line with surrounding
areas, and it could bring in more than $20,000 a year to city
coffers.
Again, this revenue is restricted on how it can be
used. It must go to support tourism.
In the general expenditures, expenses that could be
tagged as tourism would include the financial support to Main Street
Lincoln, the city's contribution to the Lincoln Art & Balloon
Festival, and also the support given to the annual Railsplitter
Festival.
--Fee increases in zoning and building
Another new stream of money may come from the city's
zoning and safety office. John Lebegue, the city's new zoning
officer, said that he has done a cursory exam of the fees the city
is currently charging in that office and believes some changes
should be made to the fee structure. He estimated that modest
changes to those fees could bring in an additional $20,000 per year.
He also reminded the city that the recent changes made to the
enterprise zone agreements will add money to the city coffers as new
zoning projects are introduced this year.
Good news comes to the council
Early on in the Thursday night meeting, Alderwoman
Joni Tibbs said that the fire department at least had received a
little good news. She asked Hulett to explain what she was talking
about.
Hulett had applied for a grant in the amount of
roughly $40,000 to add a new exhaust system to the existing
firehouse. This was needed because firing up the diesel engines in
the trucks while they were inside the building was posing a health
hazard to the firefighters.
Hulett said he had received word that the grant was
a done deal. The city will definitely get that money this coming
year.
Attached to that grant, the city will have to pay 5
percent of the expense, but because it is considered an improvement
to the fire station, it can be labeled as a capital expense and
taken out of the general obligation bond.
With a sigh of relief
At the end of the Thursday night meeting there was a
definite collective sigh of relief. The time invested in this year's
budget by the council in general and Anderson, Plotner and the city
clerk staff in particular has been huge, but in the end the job
seems to be done for another year.
At the end of the meeting, Anderson expressed her
sincere appreciation to the department heads who had been more than
willing to bite the bullet and cut their budgets to the bare bones
for this year.
Earlier in the meeting she had also commented on
city employees in general, saying that she had felt very good about
the meetings she'd attended with the employees and their unions. She
commented that she had left the meetings thinking, "This is the way
things should be," as she felt everyone was willing to do their part
to help the city through a really rough year.
The council will meet on Tuesday at 5:45 p.m. to
hear whether or not the unions have agreed to any of the suggestions
for saving money.
Hopefully all will go well, but if not, Busby said
that they would just have to go through the budget and cut again,
and whatever they cut, they'd all just have to live with it.
[By NILA SMITH]
 |
