 For the first time in several weeks, all 10 aldermen were present
for a portion of the meeting. Alderman Buzz Busby, who has been
recovering from heart surgery, arrived at the meeting around 9 and
stayed until approximately 10:30.
Also back in chambers for the meeting was the familiar face of
Les Plotner, former city treasurer.
When the current city treasurer, Chuck Conzo, spoke to the group
about projected revenues for the coming year, he made a point of
thanking Plotner for the help he has given Conzo in working through
the revenues for the city.
This is Conzo's first year of dealing with the building of the
budget. He said that Plotner had offered a lot of insight on the
various tax revenues the city receives each year.
Talking about expected revenues, Conzo said the bright spot in
the budget this year is an expected increase in municipal sales tax.
He also projected an increase in replacement tax revenues but
countered those with decreases in outside fire protection revenues
and state income tax.
Conzo concluded the total revenues for the city will come to
$11,295,376 all-inclusive. This total represents the general
operating revenues plus funds that come into the city with
restricted uses, such as the sewer revenues, which are estimated at
$2.8 million for the coming year.
The portion of the revenues that falls in the general operating
category totaled $5,848,432.
The budget as it stands now, all-inclusive, is about $13 million
in expenditures with only $11 million in revenues for the coming
year.
When Alderwoman Melody Anderson brought this to the council's
attention, she went on to explain a portion of the liabilities that
is never satisfied.
Each year the city budgets approximately $1,000,000 each for the
two pension funds for fire and police. The money going into those
funds through the increase in property tax levies never reaches that
amount, and the city never adds cash from other sources to this
account. The unpaid amount is kept on the city books as an unfunded
liability.
Anderson said the unfunded liability for the police department is
$568,000 and for the fire department $641,700, which comes to a
total of $1,209,700.
Anderson said that if the $1.2 million is subtracted from the
expenses for the year, the annual total will drop to $11.8 million.
With approximately $11.3 million projected in revenues this creates
a shortfall of about $500,000.
Mayor Keith Snyder explained that the unfunded liability isn't
the serious issue some may believe it to be. If every person on both
the fire department payroll and the police payroll were to retire in
the coming year, the city would have to come up with that money.
However, that is not likely, and the portion of the liability that
is funded is going to cover what has to be paid out this year.
Snyder also commented that compared with other municipalities in
the state, Lincoln's retirement funds are in far better shape than
most.
Anderson said she was of the understanding that even though the
city knew they wouldn't fund the amount, it still has to go on the
books.
The council also talked about a situation that rarely comes up in
the budget-building process: the existence of cash on hand.
In past years, though not recently, the city has actually
collected more revenues than they needed to cover expenses. In the
general fund they don't have to spend the money, so over the years
there has been a cushion of cash on hand.
When the city was working on the budget one year ago, Busby spoke
about this during a session break, saying that he could well
remember a time when the city had around $7,000,000 in the bank.
Over the years that amount has dwindled because there are certain
expenses the city has to pay whether they have the revenues for it
or not.
Currently, Conzo projected that cash on hand on May 1, the
beginning of the new fiscal year, will be approximately $3,000,000.
When Busby talked about this a year ago, he said that knowing the
cushion is there is a very good thing, but the council should not
rely on it continually to make ends meet. He qualified that no
matter what, there always has to be money in the bank to make
payroll.
Knowing they have this cushion does not mean that the council is
going to give up on creating a balanced budget, because they are
not.
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There are some yet unknown factors that they are hoping will play
in their favor, such as the strong possibility of a decrease in
workers' compensation insurance premiums. The policies are not yet
up for renewal, but based on the experience rating, there is a
strong indication that the rates will go down.
In addition, Alderman Tom O'Donohue, who has expertise in this
area, is working with the insurance committee to look at different
providers. He indicated to the council he feels good about seeing a
decrease this year one way or another.
Before the end of April, the city will pay out a rebate to
Walmart of approximately $185,000. This will bring the development
agreement for the new Supercenter close to an end. For the coming
year, the final payment to Walmart will be in the vicinity of
$34,000.
This rebate, put very simply, is the difference in sales tax
collected between the new store and the old one. The city agreed to
pay Walmart approximately $600,000 total, broken into smaller annual
payments based on increases in sales tax revenues from the new
store. In return for the rebate, Walmart covered much of the cost
for infrastructure development around their new location.
With the final payment coming in the new budget year and the
amount being greatly reduced over the past years, this will equate
to the city getting to keep more of what they collect in sales tax.
In addition, the city renewed a general obligation bond this year
and thus far has spent very little of it.
There are items in the budget now that may qualify for the bond.
The general obligation bond will not help with the daily operating
of the city, but it can be used to fund capital expenditures.
Capital expenditures are for tangible assets such as equipment or
facilities that have a long life. Examples of this could be police
vehicles or fire trucks.
And finally Snyder said there is still hope of money coming to
the city from the state's capital plan. He specified that one amount
that may arrive will cover the cost of the roof replacement on City
Hall.
The city borrowed funds to do the repair and has been making loan
payments. Snyder said if the money arrives this year, it will not
only pay on the loan, but will also be enough that the city can
reimburse themselves for the loan payments they have already made.
Because the state has not yet guaranteed the money will be paid
out, it cannot be considered in the annual budget but will more than
likely be included in the city appropriation ordinance.
As the group moved on to looking at budget requests from city
department heads, Anderson said there had been one-on-one meetings
last Thursday with the departments.
The city departments have not been asked to cut their budgets,
but there are some requests for added funding that will not be
granted.
In upcoming segments of this report, the council will discuss
several of those requests, including funding for a city
administrator, for a citywide cleanup and what this year's total
expenditure will be for the city's community partners.
[By NILA SMITH]
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