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Mayor's Budget Presentation to the Omaha City Council July 21, 2015
President Gray, council members and citizens of Omaha.
It is an honor to be with you today to present our recommended 2016 city budget.
This is our third budget proposal, and during this time, I believe all of us have contributed to what has been a significant financial turnaround, resulting in healthy and stable city finances. It is encouraging that this has occurred in a relatively short period of time.
In our first year, we successfully managed projected budget deficits and stopped overspending.
In our second year, we continued to manage the budget effectively and provided a modest reduction in the property tax rate for the first time in 14 years.
In our third budget, we propose to maintain the lower property tax rate, slow general fund growth, yet still meet many significant and longtime goals, especially in the area of public safety; our number one priority.
Of our three budgets I have done, I believe this is the strongest.
Here a few highlights:
- Proposed general fund spending for 2016 is an increase of less than 2 percent, the smallest year-over-year percentage change of the three budgets. Even with this smaller increase, we are able to achieve many of the goals I have pursued since my first day in office.
- Our three-year plan to fully fund 840 sworn police officers will be achieved. In fact, a total of 851 police officers will be the revised number when we add additional neighborhoods to the city through passage of the proposed annexation package.
- We further enhance public safety by adding 15 firefighters. The recruit class scheduled next year is the first since 2012.
- Our budget adds five new inspectors in the Planning Department, new positions we have all supported for a long time.
- We will fully fund the Human Rights and Relations Department with its first fulltime director in several years and add two additional staff members.
- We continue to add more money for critical street resurfacing. Every City Council district will benefit.
- We also protect our savings accounts, the Contingent Liability Fund and the Cash Reserve Fund, which will be at their highest combined amount ever, doubling these important savings accounts in just the last five years.
Other accomplishments and milestones have allowed us to prepare an efficient and stable budget.
- We ended 2014 with a positive cash balance of $13.8 million, funds available to build our cash reserves and fund important initiatives in 2016.
- All departments are again within range of their budget targets, which creates budget stability year-to-year.
- We have greater budget certainty since we have negotiated new contracts with every civilian union, the firefighters union, and police and fire management groups. Each contract has an established pay and benefit structure.
- Improved department efficiency and productivity. For example, 91% of all electrical permits are now processed online. The Planning Department will begin an aggressive training program with other trades, to increase the use of the Acella system. This will increase the number of mechanical and plumbing permits online.
- We have also experienced continued city growth and increased revenue generated by prior annexations.
On that point, today’s council agenda includes the first reading of our annexation proposal. The Planning Board has already approved the package unanimously.
Annexation is a unique option, that when used properly, reduces taxes for nearly all new city residents, expands our property tax base, and generates new revenue to increase and improve city services. Past annexations have provided revenue to increase funding to our priority areas, such as public safety and street resurfacing. If you believe, as I do, that these are priority areas worthy of increased funding in the future, then reasonable city growth through annexation is part of the solution. There are good reasons that for decades, city planning boards, city councils and mayors, regardless of political party, have supported steady growth through annexation. Your unanimous support of last year’s final annexation package continued this decades-long, sensible approach to managing our city.To be clear, our long-term ability to adequately fund our shared priorities and create opportunities for exciting developments in our urban core depends, in part, on this continued economic growth. I urge you to adopt it.
Let me comment on a few budget areas we all care deeply about.
We will meet our goal of fully funding the sworn strength of the Omaha Police Department in 2016. Our sworn strength will be at a record high of 840 officers. I am proud of that achievement and the benefit to our citizens. Yet, our top priority of public safety challenges all of us as elected leaders, citizen leaders, law enforcement, parents, educators, and faith leaders. At no other time has the challenge been more clear than with the tragic loss of Officer Kerrie Orozco. The brave men and women in blue who protect us every day deserve a strong, well equipped, and well trained police force. Of course, our citizens deserve it too.
Reaching our three-year staffing goal is not the end of our work. We are already determining staffing needs in 2017 and 2018.
Chief Todd Schmaderer and his executive staff will apply the same criteria used to get us to the 2016 record high, which are: future city growth, crime data and trends, and a sustainable funding source; not a simplistic one size fits all formula. All three are critical to assess our staffing needs to keep the citizens of Omaha safe.
Many major cities are currently seeing a significant increase in homicides, shooting and violent crime. We are concerned only about Omaha where many of our initiatives are making a difference. For example:
- Increased Shot Spotter technology
- Reorganization of the Criminal Investigation Bureau to address property crimes. In a short time, this has led to an increased clearance rate for burglaries and auto theft.
- Creation of the forensic analysis unit
- Gang specialists, hired and working in north and south Omaha
- The clearance rate for homicide two years in a row is impressive. In fact, in the last two weeks, OPD has solved five homicides and eight since May of this year. This is a sign that the community and the police are working together to address our most violent offense.
OMAHA PUBLIC LIBRARY:
Last year, our 12 libraries reported more than two million visits and provided citizens high quality services and information. I am recommending a general fund increase for our libraries of over 9%, one of the highest percentage increases in this budget. As you know, the library relies on funding outside the city general fund and those sources will provide less funding next year. The net increase from all sources provides the Omaha Public Library with an increase of 2.7% I believe this increase allows the Library to continue providing a high level of service to all visitors. With an increased budget, closing libraries, cutting hours or reducing services is not necessary and would be a disservice to our community.
We propose an increase of over one million dollars to reach a street resurfacing and repair budget next year of $8.8 million. This includes asphalt, concrete and brick streets. Our focus will continue to be streets in the eastern part of our city, like Ames Avenue, which is being resurfaced this week, from 28th Street to Fontenelle Boulevard.
That is one example of our 2015 resurfacing program. We are spending $11 million on streets in the four city council districts that represent every citizen east of 72nd Street. These funds come from many sources, including bonds, wheel tax and the state gas tax. These streets are vital to public safety, commerce, employment, education, and family life and they must be maintained.
Just a couple days ago, I received an email from a taxpayer who lives in Councilman Gray’s district. She wrote: “My husband and I live on Young Street and our road was just resurfaced. We just want to say thank you and tell you what a great job the contractor did. The workers were efficient, quick, and did an excellent job.”
We sure appreciate the message.
We are evaluating several new funding strategies to further increase our street resurfacing budget without raising taxes or fees. I will brief you as those plans develop.
Our proposed parks department budget includes over one million dollars for replacement of park maintenance equipment, including high-capacity mowers. We estimate our staff can mow 700 acres of park land and public property every week with these upgrades.
EMPLOYMENT AND JOB TRAINING:
We propose spending over $1 million on job training, and workforce development programs.
This includes our initial investment in “REACH”, the Greater Omaha Chamber’s new, comprehensive program to support Omaha’s small and emerging businesses. Our support of Heartland Workforce Solutions will increase from $40,000 to $440,000. Once again, we will again provide $500,000 to the “Step-Up” Summer Jobs Program. The City continues to be the principal funder of this program to train young people for employment and connect them with jobs.
Finally, the 2016 revenue projections:
We anticipate an increase in property tax revenues of 3.4%, and maintain the lower property tax rate that you adopted for this year. Sales tax revenue is projected to increase the same-3.4%. We anticipate restaurant tax revenues for next year to be similar to 2015.
Incidentally, citizens often ask me about our restaurant tax. My view of it is unchanged since I voted against it as a councilmember five years ago. Reducing or eliminating the restaurant tax remains a goal for my administration.
However, in developing budgets to this point, I have placed a greater priority on property tax relief, building the city’s cash reserves, improving pension fund balances, and significantly increasing the number of Omaha police officers.
In the last year, we have received a great number of ideas on ways to improve our city finances, increase efficiencies, and provide better service.
We’ve heard from the City Council and we appreciate that. And we hear from citizens at our town hall meetings, the Mayor’s Hotline , letters, and online comments, like this:
“Many times it is the small things that are left unmanaged, overlooked and people are held unaccountable. I have noticed many small things that are now different, better timed traffic signals, pre-treating streets in the winter, and street cleaning in the spring. All add up to a better run city of good things that can happen, with the correct leadership, to turn this city in a positive direction. Keep up the good work.”
The exchange of ideas for the future of our city is so important. I encourage citizens to attend the budget public hearing in this chamber on Tuesday evening, August 11th at 7:00.
You can review the proposed budget which is available on the City of Omaha website ( http://www.cityofomaha.org/finance).
We look forward to City Council deliberations over the next month as you consider and approve a 2016 budget.
We will work hard to address your questions, concerns and suggestions.
The people of Omaha are optimistic, devoted, resourceful, and determined. They have high expectations of those they honor with the privilege of public service. All of us work each day to earn their trust.
I pledge to work with you to finalize a budget that is a positive reflection of those who fund it.