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Mayor Jean Stothert | City of Omaha

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Governor Dave Heineman and Omaha Mayor Jean Stothert highlighted the positive outcomes of the “Build Nebraska Act” for the citizens of Omaha, and the state at a news conference Wednesday in Omaha. The Governor and Mayor were joined by Nebraska Department of Roads Director Randy Peters and Omaha City Engineer Todd Pfitzer to provide an update on progress of the Build Nebraska Act projects in Omaha.

In 2011, Governor Heineman signed LB 84, titled the Build Nebraska Act, into law. As a result, beginning July 1, 2013, funding could be shared from existing sales tax at a rate of one-quarter of one percent is shared with the State Department of Roads (85%) and the cities and counties (15%).

“The Build Nebraska Act is having a positive impact throughout the state and benefits our citizens and travelers in Nebraska,” said Gov. Heineman. “Prior to the Build Nebraska Act, the focus of our roads program had been on asset preservation of our current roads and bridges. That left hardly any funds for much-needed capital improvement projects. This year, there have been new highway improvement projects underway during the 2014 construction season and that is good news.”

“The Governor’s commitment to public safety is apparent with the improvements made on the interstates around Omaha and the state highways through the city. We are grateful for the state funding that has made major projects possible, especially the resurfacing of Dodge Street from downtown to Westroads,” said Mayor Stothert. "Our city is growing, traffic volume is increasing and the new construction makes the daily commute safer for everyone who lives here and passes through our city on the interstate."

Three projects in Omaha, I-80 Eastbound between 126th and 96th Street, I-80 Westbound between I-480 and 60th Street, and I-680 Northbound between Center and Pacific Streets are either already open to traffic or will be shortly.

Department of Roads Director Randy Peters said, “We are so gratified at the Department of Roads to be able to have under construction, several highway projects we have needed on our system for a long time.  We are equally pleased these three projects in Omaha could be delivered already this year.”

“As always, the focus remains on improving safety, delivering projects and taking care of the State’s transportation assets.  This we continue to do while taking care of the natural environment, bringing mobility to the traveler, implementing good fiscal management and working together with Nebraska highway users.  Nebraska is on the move, and we want this momentum to continue,” Director Peters added.

Projects included in the Build Nebraska efforts are statewide. Additional projects are underway or planned for several areas including Lincoln, Kearney, Fremont, Nebraska City, Murray, as well as a portion of the Heartland Expressway in the Alliance area.

The Build Nebraska efforts include 17 capital improvement projects over a 10-year period, divided into three tiers. Projects are planned for Fiscal Years 2014-2015, FY 2016-2019 and FY 2020-2023, and are expected to total more than $790 million when completed. Tier 1 is expected to total approximately $155 million. The Omaha projects discussed today are included in Tier 1 and represent approximately $30 million of that funding. Tier 2 projects are an expected total of approximately $305 million, with Tier 3 at approximately $331 million.

A complete list of projects is available on the Nebraska Department of Roads website at: www.transportation.nebraska.gov/lb-84

Members of the Omaha Civilian Union, Local 251, have approved a tentative agreement that includes unprecedented pension reform and a solution for the pension system’s current unfunded liability.  

“Pension reform was our number one goal in these negotiations,” said Mayor Jean Stothert. “We all realize the unfunded pension liability affects the financial stability of our city and it must be addressed.  I am grateful to Local 251, which is the first civilian union to step up and support significant pension changes.”

The 5-year contract (2013-2017) includes the city’s first cash balance pension plan. New employees hired on or after January 1, 2015 will participate in this plan. Current employees will remain on the existing defined benefit pension plan but with substantially reduced pension benefits and an extension of the number of years required to achieve normal retirement. The City has also agreed to increase its contributions to the pension fund by 7% over the 5-year agreement.

The pension changes create a fix for the civilian pension fund, which would be bankrupt in approximately 20 years without this solution.  With this reform, the fund is expected to be fully-funded in less than 25 years. The fund is currently approximately $205 million underfunded.

“The cash balance plan is the key to solving our pension liabilities,” said Mayor Stothert.  “It better protects the City against market volatility, provides a fair pension that our employees can depend on and offers greater protection against future unfunded pension liability than the current plan.”

The contract also includes a 9% wage increase over the 5-year term of the contract, including a  one-time  lump sum supplement for 2013 to offset a wage freeze.  The 1% supplement is based on the employee’s non-overtime earnings in 2013.  

As Local 251 is  on the City’s preferred health insurance plan, the  contract maintains the current health care plan design but allows either side to reopen health care negotiations only in  2015 for changes to take effect in 2016.

Local 251 is the largest civilian union, representing approximately 634 employees. The City is also negotiating with CMPTEC, which represents 375 employees.  CMPTEC previously rejected the City’s most recent offer and made a counter, which the City calls “unacceptable”.

“We expect to present CMPTEC with the same offer that Local 251 has already ratified, and we are hopeful the CMPTEC members will cooperate with this much needed pension reform,” said Mayor Stothert.

 The Local 251 tentative agreement must now be approved by the Personnel Board and the Omaha City Council.

Beginning January 5, 2015, solid waste, yard waste and recyclable pickup routes and schedules will change, affecting most Omaha households.

The changes are the first in thirty years and are expected to improve service.

"We all want dependable trash service.  These changes will eliminate an unbalanced jigsaw puzzle-like collection system and create more uniform, efficient routes," said Mayor Jean Stothert.

The City will be resectored into five bands from east to west. Collections will begin on Mondays in the southernmost parts of the city. Each day, collections will move further north, ending on Friday.  (story continues after maps)

These changes are being introduced eight weeks before the effective date to avoid confusion and missed collections beginning in January.

The resectoring plan, developed in partnership with the contractor, was created using state-of-the-art routing software to gain efficiencies in collections.  Trash will still be taken to the Pheasant Point landfill in northwest Douglas County and recyclables will be delivered to Firstar Fiber.  Yard waste will continue to be processed at the Oma-Gro facility at the Papillion Creek Wastewater Treatment Plant.

The fall issue of Wasteline will be delivered to all residential customers beginning Friday November 14.  A second issue will be delivered in mid-December.  These newsletters will provide important reminders of the resectoring plan.  Each customer will also receive a personalized postcard reminder beginning the week of December 29th providing their specific new collection date.

A website has also been created so customers can view their new collection date at any time, http://newday.wasteline.org. Users can enter their home address and receive information about their current collection day and their new collection day.

"We have been working on this plan for nearly two years," said Public Works Director Bob Stubbe.  "We understand there will be some growing pains with the changes, but we're confident this will help us provide more timely service, even in peak times of the year." 

The City provides collection service to nearly 130,000 households; 73% will be affected by the change. The resectoring plan also takes into account continued growth of the city.

This plan changes only the pickup routes and schedule.  There will not be any changes in the type of trash containers allowed, preparation or the materials collected.  The route changes will remain in effect when the Deffenbaugh sale to Waste Management is approved and takes effect next year.

Citizens can call the Mayor’s Hotline, 402-444-5555 with questions,  Monday-Friday 8:00 a.m. – 4:30 p.m. or the Solid Waste Hotline, 402-444-5238 anytime.

After nine months, the City of Omaha 2014 fiscal year is expected to end with a $9.5 million surplus. The third quarter financial report, released Thursday shows expenses are under budget by $5.6 million dollars; revenue is up by nearly $4 million.

“We are controlling expenses,” said Mayor Jean Stothert. “Revenue can be unpredictable. That’s why we monitor expenses department by department constantly, always careful not to reduce the services taxpayers expect and deserve.”

Highlights of the 3rd quarter report include:

  •  The Police Department is estimated to be $3.05 million under budget due to savings in wages and benefits and health care costs.

 

  • Planning, Parks, Finance, Human Resources, Public Works and Library are also projected to be under the general fund budget.

 

  • The Omaha Fire Department remains slightly over budget; less than a half million dollars, ($0.34 million) attributed to wages and costs associated with injuries, resignations and the deaths of active duty firefighters. 

 

  • Property tax and sales tax revenue is up, while restaurant tax revenue is under budget by $1 million.

The 2014 projected surplus has grown from $6.1 million at the end of the second quarter to $9.5 million.

“Our entire team deserves credit for this strong report,” said Finance Director Steve Curtiss. “Much of the savings is in personnel and health care costs and I expect this trend to continue through the remainder of the year.”  

The City Charter will require the year end surplus to be carried over to 2016.

“For three consecutive quarters we have controlled spending and managed the budget. The projected surplus shows my commitment to spending the taxpayer’s money carefully,” said Mayor Stothert.   

A comprehensive study of the Omaha-Council Bluffs riverfront began today. 

A team from ULI, Urban Land Institute, will survey both cities, interview dozens of stakeholders and present a preliminary report at the end of the week.  ULI is a non-profit research organization that specializes in land use.

Omaha Mayor Jean Stothert, Council Bluffs Mayor Matt Walsh and the Greater Omaha Chamber invited ULI to evaluate commercial and residential development, recreation and entertainment opportunities on both sides of the river.

“The riverfront is our front door and we have a tremendous opportunity to make it a destination for the residents of our communities and visitors,” said Mayor Stothert. “ULI will provide ideas that can guide our next steps and promote collaboration between Omaha and Council Bluffs and the private partners who share our enthusiasm for this unique space.”    

Since late 2013, discussions have been underway to determine how to activate and promote the riverfront. ULI was identified and hired to provide impartial evaluation and input.

“For the last 160 years North America's longest river has been the common thread binding together our two communities,” said Mayor Walsh.“For much of that timeframe the Missouri River had continued to be an untapped resource for most local citizens and visitors. In the last fifteen years, both communities have made significant investments toward riverfront improvement. The purpose of this study is about taking a fresh look through the neutral eyes of the Urban Land Institute’s professional consultants at this great natural resource and it is our hope that we can discover new ways to enhance the riverfront experience for everyone.”

More than 70 people have been invited to interviews with ULI teams, including Mayor Stothert, Mayor  Walsh, community and business leaders.

“For nearly two decades, community vision and collaboration transformed our riverfront into a destination flowing with promise.  Now, that same combination is committed to re-energize and fuel new pride in the region, creating a vibrant, enhanced space to attract visitors, our residents and the professional talent our businesses need to thrive,” said David G. Brown, President and CEO of the Greater Omaha Chamber.  

The total cost of the ULI study is $150,000,  funded with donations from the private sector.  

The preliminary report will be presented Friday at 9:00 a.m. at the Holiday Inn at Ameristar, 2200 River Road in Council Bluffs.

For more information about Urban Land Institute: http://uli.org

ULI PRELIMINARY RECOMMENDATIONS

 

Two bond rating agencies have different views on Omaha’s financial position.

Standard & Poor’s has reaffirmed Omaha’s AA+ bond rating, the second highest rating possible.

Moody’s Investment Service has downgraded Omaha’s rating, from Aa1 to Aa2, but describes the city’s financial outlook as stable; an improvement from the negative outlook issued last year.  Moody’s cites Omaha’s solid financial track record, strong management team, and growing tax base that may withstand some future budgetary pressures.  Moody’s Aa2  rating indicates a city’s very strong capacity to meet financial commitments.  Omaha’s bond rating is still better than 80% of all U.S. cities.

Moody’s listed four main reasons for the Aa2 rating:

  • A growing unfunded pension liability
  • Health care costs for retired employees
  • Unsettled labor contracts
  • The federally mandated CSO program

“This bond rating shows we still have a lot of work to do in reforming our public employee pensions,” said Mayor Jean Stothert.  “Our unions must realize the severe consequences of delays, inaction and failure to accept reasonable contract offers that solve the unfunded pension liability, protect taxpayers and stabilize the financial condition of the City.”

Just today, the Civilian Management Professional and Technical Employees Council (CMPTEC) rejected a 5-year contract offer that would have eliminated the unfunded pension liability in 24 years.  The other civilian union Local 251, is scheduled to vote on a tentative contract agreement next month.   Local 385, the Firefighters Union is currently negotiating with the City; its contract expires at the end of 2014 and negotiations with the Omaha Police Officers Association stalled when the union filed a lawsuit against the City.  

“The unions must be part of the solution,” said Mayor Stothert.  “Moody’s report specifically points out that pension changes need union approval, limiting management control and our efforts to make positive improvements.”

Prior to Moody’s visit to Omaha last week, a new pension projection report by Cavanaugh Macdonald showed the fire and police unfunded pension liability will be fully funded and solvent in approximately 22 years.

In a statement last week, the Mayor said, "We have not crossed the finish line yet. We will continue to push for further pension reform to protect the City and the taxpayers from future liability. The City must be able to manage the budget with a pension system that is more predictable than the plan we currently have.”

Omaha issues general obligation bonds annually to finance streets, sewers, parks, public safety and public facilities projects.

The Civilian Management Professional and Technical Employees Council (CMPTEC) has rejected the City’s 5-year contract offer.  It included unprecedented pension reform and solved the union’s unfunded pension liability.

“CMPTEC steadfastly refuses to accept our proposal,” said Mayor Jean Stothert. “It would have created a new pension plan for future employees, but the union wants the City to continue with the risky defined benefit plan which puts all the risk on taxpayers and no risk on the employees.

That’s not a reasonable demand and they don’t understand what’s at stake.”

The City’s offer would have created a cash balance pension plan for CMPTEC employees hired after January 1, 2015, and substantially reformed the existing defined benefit plan for current CMPTEC employees. It would completely eliminate the current, dangerously high unfunded pension liability in roughly 24 years, and further protect taxpayers from the possibility of future unfunded liability.  

“The cash balance plan is the key to solving our civilian pension liabilities,” said Mayor Stothert.  “It protects the City against market fluctuations and still provides a fair pension that our employees can depend on. Our unions have to work with us, not against us.”

CMPTEC also rejected a significant 9% wage increase offered over the 5-year term of the contract, and the City’s increased contribution to the employee’s pension by 7%. The health care benefits in the rejected contract would have remained unchanged.

There are approximately 450 employees covered by the CMPTEC bargaining unit.

The City has reached a tentative agreement with the other civilian union, Local 251. A vote is scheduled in November.  The agreement with Local 251 also includes a cash balance  pension plan for new employees that would result in a fully funded pension plan in 24 years and a 9% salary increase over the 5-year term of the contract. 

Omaha Mayor Jean Stothert is expected to testify Friday in a lawsuit filed against the City of Omaha by the Omaha Police Officers Association Local 101. 

The union filed the lawsuit June 25th, alleging the City did not provide “written notice” to open contract negotiations and therefore, the current labor agreement which expired in 2013 had automatically rolled over to the end of 2014.  The City calls the union’s lawsuit a game of gotcha, as negotiations had started several months earlier, even including a contract offer from the union and a counter offer from the City. The union has characterized its actions only as a "courtesy" and "listening to commentary" of the City.

The City has asked the Court to rule that the contract has not rolled over and the union must resume negotiations for 2014.

“We have repeatedly asked the union to restart negotiations and avoid trial and the union has refused,” said Mayor Jean Stothert. “The union’s attempt to avoid negotiating is unprecedented.  Never before has one side attempted to roll over a contract against the will of the other.”

The trial is scheduled to begin Thursday at 1:00 p.m. in Douglas County District Court Judge Joseph Troia’s courtroom.  The City’s negotiator Mark McQueen, Labor Relations Director Steve Kerrigan and Police Chief Todd Schmaderer are also expected to testify.

 

 

A new report prepared for the Omaha Police and Fire Pension Board shows a significant turnaround in the pension fund, even projecting the fund will be solvent and fully funded more than 20 years earlier than expected.

"This is good news for the taxpayers, our police and fire employees and our bond investors," said Mayor Jean Stothert. "The underfunded  pension liability is a result of costly decisions made by prior administrations. My administration is working hard to shore up the pension under-funding."

The actuarial projection, prepared by Cavanaugh MacDonald Consulting, shows pension reforms negotiated in the current police and fire union contracts are working. Those reforms include the elimination of spiking, an agreement with police and fire employees to reduce benefits and raise the retirement age. Both the employees and the City also agreed to contribute more to the pension fund.

Before those reforms were implemented, the pension fund was expected to run out of money and go broke in 20 years. The unfunded pension liability, estimated at $622 million, is now projected to be solvent and fully funded in 21 years, with no additional contributions from taxpayers beyond the current compensation package. That compares with the previous estimate of 44 years.

Omaha Police Sergeant Aaron Hanson, a Pension Board Trustee, called the new projections a testament to collaboration and hard work by all sides. "You would be hard-pressed to find other cities that have taken the steps we have. "The collaborative work we have done in Omaha is probably the template for other city and county governments struggling with pensions," said Hanson. The Pension Board requested the study last spring; it was delivered October 10th and will be discussed at Thursday's meeting of the Pension Board. Mayor Stothert said the report is unrelated to the Alliance for the Public Sector's criticism of the unfunded pensions and the City's plans to solve it.

City Finance Director Stephen Curtiss said the actuarial projection is based on a number of assumptions, including an 8% return on investments. Curtiss acknowledged 8% is considered high by some standards.  "We agree that's high for a domestic portfolio, but we don't have a domestic portfolio, said Curtiss.  "We have a diversified portfolio, which has returned 9.7 percent for the last 35 years." 

Mayor Stothert said the new projection should be celebrated but there is more work to do.  "We have not crossed the finish line yet. We will continue to push for further pension reform, to protect the City and the taxpayers from future liability. The City must be able to manage the budget with a pension system that is more predictable than the plan we currently have and protects taxpayers against market fluctuations."

The Mayor gave credit to the negotiating teams, "In the end, we have two contracts that resulted in the report we have today."

Read the Cavanaugh Macdonald report.

The Omaha Civilians Union, Local 251, voted Tuesday to reject the City’s contract offer.

“We provided a solution that is fair to our employees and did not place increased burden on the taxpayers,” said Mayor Jean Stothert. “The unions must share the responsibility for pension reform.  Without a solution, the Civilian Union pension will go broke.  This vote is very disappointing.”

Discussions between the City and Local 251 leadership have continued since the vote and there may be a middle ground. The City understands the union plans to make another counter offer and is waiting for a specific proposal which could lead to a second vote by union membership.