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1
Mar

Council delays retirement proposal

The Lincoln City Council voted last night to delay action on the mayor’s proposal to reduce retirement benefits for future mayoral aides and directors.

After Winterized reported last week that Mayor Chris Beutler and his aides and about a dozen directors receive a more generous retirement benefit than any other city employees, Beutler announced his plan to reduce those benefits, but only for people hired after April.

The legislation was on the City Council agenda last night, but Councilman Jon Camp made a motion to put the legislation on pending for two weeks. He said he wanted time to talk to the city attorney and mayor’s office to see if the match could get down to a 1-to-1 match and have it be effective immediately.

“I think there are a number of things to discuss,” Camp said. “We have not had a chance to have input.”

Several council members have said they didn’t know the legislation was coming.

Councilman Adam Hornung said since Beutler’s proposal doesn’t apply to existing employees, the council has plenty of time.

The council voted 6-1 to delay the process so the public hearing on the matter will be March 21.

1
Mar

City projects $6.3 million deficit this year — not counting loss of state aid, raises

It’s going to be a rough budget year — again — in Lincoln. And there appears to be no end in sight to Lincoln’s budget problems.

The city has a projected $6.3 million budget shortfall right now, and that’s not taking into account the cost of employee pay raises, the loss of state aid and the potential loss of tax revenue thanks to changes being considered by state lawmakers. The city projects that gap will widen to $19 million in five years, if things don’t change.

I filed an open records request last week, seeking to see budget projections the city generates every year. Before Mayor Chris Beutler took office, the projections were released to the press in December. But Beutler ended the practice, saying it caused undue consternation.

As a candidate for the City Council, I wanted to see the figures so I’d know what this city is facing. Before giving the data to me, the mayor’s chief of staff, Rick Hoppe, gave the budget projections to City Council members after their meeting last night because they don’t appreciate learning such things in the press. Hoppe said one council member immediately told a Journal Star reporter, who then asked for the projections, too, which is why you see the story in the paper today.

The data indicates Lincoln will be facing a budget shortfall of up to $10 million — perhaps the largest ever in the city’s history — when other factors are taken into consideration. City Budget Officer Steve Hubka projects a $6.3 million budget gap will have to be closed this year — and that’s not even taking into account raises for most city employees. He included annual raises for just two unions, since they have contracts for 2011-2012. He did include step raises, which employees get if they’re not at the top of their pay range.

That should add a few million dollars to the bill. In addition, the projection didn’t assume the state would cut state aid by $1.8 million — as is being considered. Lawmakers are also considering taking away Lincoln’s right to levy telecommunications occupation taxes — another big hit if it passes.

Hubka’s projections assume city sales tax revenue will grow at 2 percent per year and property tax value will grow .75 percent for three years and then 1 percent.

Hoppe characterized the situation in LJS as “a little bit worse” than past deficits. But he acknowledged the effect of the city using $4 million in one-time funds last year to bridge the gap. He also mentioned the existence of one discretionary fund, an economic development fund called the Fast Forward Fund, which has more than $6 million in it. So get ready to see that fund disappear.

Lincoln has had to close budget shortfalls every year for at least six years — and this year will be no different. Beutler was elected on a promise to fix the city’s structural budget problems, but this data indicates the problem has only gotten worse, not better.

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