NTF Worksheet: ccwatch32.doc.  7-06.

NEBRASKA TAXPAYERS FOR FREEDOM WORKSHEET:

ANALYSIS OF THE CITY OF OMAHA BUDGET: FY 2006-2007. 

BACKGROUND.  In his budget presentation to the Omaha City Council, Mayor Fahey declared that our city faces long-term financial challenges because of revenue shortfalls.  Sales tax and state aid revenues are static or decreasing.  The Mayor, and I am sure the City Council, will appreciate suggestions for balancing this and future budgets.  Although the budget keeps the property tax levy the same, many Omahans experienced drastic property valuation hikes this and previous years, so they will be paying much higher property taxes to the city to feed the property tax requirement for the General Fund 3% more.  Although local sales tax revenues may have slumped, especially from sale of new vehicles (p. 116), the 2006 projection in the budget is 4% higher than actual 2005 receipts (p. 113).  

BUDGET CUT & EFFICIENCY SUGGESTIONS. 

• The Mayor wants yearly sewer rate hikes that will nearly double what the average homeowner pays in monthly sewer fees, for a revenue increase of 8.3% (p. 115).  The need for this hike reflects the city meeting an unfunded federal mandate.  The city pays a lobbyist.  We suggest that the lobbyist, the Office of the Mayor, and the City Council together lobby our Capitol Hill representatives to either delay or nullify legislatively this unfunded mandate.  Such lobbying might save the city the cost of a $24.7 million study to show how to bring our sewer system into compliance with the federal mandate and a later $500+ million cost to implement mandated changes.
• Lobby state and federal governments to fund or end unfunded mandates on local governments. 
• To bolster the city funding base, we suggest asking city employees and retired employees to pay a higher percentage of their health insurance premiums. Retiree COBRA health insurance costs have risen by 28.4% since 2005.  The City of Omaha spent about $32 million in FY 2005-06 for health care premiums.  The city is spending an accelerated amount on these premiums.  State of Nebraska employees pay 21% of their health insurance premiums.  Federal employees pay 28%.  University employees now pay 20% of their premiums.  The premium share for employees in the private sector is 30%.  We urge both the Mayor’s office and City Council to bargain new contracts that will mandate that all city employees and retired employees pay at least 21% of their health care premiums, with increased deductibles and co-payments for prescription drugs.  If the unions balk, appeal to the Commission on Industrial Relations in Lincoln.  The savings to the City of Omaha would allow the city council to lower the property tax rate in future fiscal years.  (See our attached issue paper).
• Reconfigure the retiree supplemental pension benefits system, which we believe much too generous, scheduled in this budget to rise another 2% this next fiscal year (p. 379).  Prevent police and fire division employees from loading up on overtime shortly before retirement in order to boost their pension benefits.  Reform the unfunded pension liability problem by reconfiguring how pensions base on salaries.
  Veto the extra $500,000 of funding for the convention and visitors bureau.  This entity and MECA both have failed to attract the projected number of conventions and other events to the Qwest Center, leaving property taxpayers the duty to pour in additional funding in future years, yet their operating budgets grow (p. 146, p. 364).  Privatize this operation.  Hire a private company to publicize our entertainment centers and solicit conventions, sports events, etc., with a stipulation that it garners a minimum number of events or forfeit a percentage of its contract payment.
  Veto the earmarked $500,000 in proposed grant funding for the Mutual of Omaha campus area.  If neighborhoods want to expend so much capital to improve the aesthetics of their areas, they should join to create a separate taxing authority and solicit contributions from area businesses, not siphon off revenues from the rest of us taxpayers. 
  Decrease funding for community service programs, scheduled to rise by 15%.  Examples: The Performing Arts Center, Downtown Celebration Lights, Classic Golf Tournament, and Women Against Violence.  Jacksonville, Fla. has led the way in cutting funding for non-profit city organizations.
• Decrease or end dues paid for Chamber of Commerce membership.
• Eliminate the position public safety auditor, saving $249,518 (p. 124).  Replace it with a volunteer, unpaid civilian review board.
• Solicit nearby communities to join together in a larger workers compensation pool. 
• Establish additional interlocal agreements with neighboring government entities, e.g., sharing equipment, training, ambulance service, and building inspectors.
• Offer voluntary employment termination packages with severance benefits.
• End automatic pay escalators in labor contracts.
• Trim Police Division overtime.
• Reduce travel costs of city employees.
• Place advertising on police cruisers and public works vehicles.
• Privatize public works assignments to stem dept. increased expenditures.  More privatization means less spent on health care benefits.
• Privatize services to access expertise and technology resources available in the private sector for savings and more efficient delivery of services.  In opening provision of services to the private marketplace, if there exists competition, cost savings and increased responsiveness will occur.
• Increase use of computerization.  Computerized services for police can allow them to enter information from vehicle accidents and traffic tickets to reduce their time handling paperwork and reduce clerical staff time.  Citizens could more easily access city information and services.
• Such increased computerization usage could bring collaborative agreements with other municipalities to share specialized equipment and software, jointly purchased software, and shared networks and software specialists. 
• Outsource management of this computerization.  Private companies in Minnesota developed GovOffice to allow cities to administer their web sites easily, post information on city services, and provide easy ways for citizens to submit information feedback, which would save Omaha citizens the hassle of trips downtown and finding parking spaces.
• Double fines for traffic tickets paid late.
• Fees levied should equal the total cost of providing a service, e.g., overhead, salaries, time, equipment.
• Use community service organizations and non-profits to help deliver services or administer programs.
• Encourage volunteer groups to help, such as handling paperwork at the Police Division, thus allowing officers to spend more time on the street.
• Hold citizen forums to ask them to set appropriations priorities to help city government make budget cut decisions.
• As your homework assignment, read The Resource Guide for Dealing With Budget Cuts: Strategies for Cities 2004.  http://www.lmnc.org/library/budgetcutresources.cfm.

Research and analysis for this worksheet done by Nebraska Taxpayers for Freedom, with express prior permission granted for its use by Citizens for Local Control, Cherry County Taxpayers, Dawes County Taxpayers, and other groups in the Tax Freedom Network.  7-06  C