The city's educational campaign to provide information about the quarter-cent sales tax ballot issue is legal, according to Chris Connolly, acting city attorney.
The public money is being spent for public education, not an advocacy campaign, Connolly told the Lincoln City Council this week after a former school board member raised questions about the $190,000 in public spending during the council’s public comment period.
State law prohibits spending money on ballot issue campaigns. The city can’t advocate for or against a ballot issue, Connolly said.
Former school board member and former Lincoln development attorney Peter Katt questioned the city spending $190,000 in tax dollars for an educational campaign about the quarter-cent tax ballot issue.
The ballot issue asks voters to approve a six-year quarter-cent sales tax hike that will be used for street maintenance and construction.
The city money, earlier described as $187,000 but more recently as $190,000, is part of a planned $265,000 educational campaign that will include brochures in Lincoln water bills, television and radio public service announcements and four open houses for the public. The Lincoln Chamber of Commerce Foundation is providing $75,000 of the funding.
Katt said he didn’t think the Lincoln Board of Education ever spent money or hired consultants for educational campaigns on school board issues.
And he had a one-word comment on the $190,000 amount. "Wow."
Katt, who lives in Lincoln but is now involved in the Omaha real estate market, doesn't think the city should be spending tax dollars on an educational campaign.
“Even if spending money on this campaign is legal, I still think it is improper," he said. “It is fundamentally unfair for the city to spend $187,000 convincing the public that you need money. I don’t agree with it.”
The campaign provides no place for those who disagree to offer their views, he said, pointing out that the four public forums do not provide a way for an opponent to offer information.
The city's consultant has booths where people can get information about the proposal at the forums but no venue for dissent.
But city leaders said the public engagement and information efforts are "customary and critical components of the city street program."
“The city is asking our residents to make a major community decision on a $78 million question. It is imperative that people understand what the ballot question means for them, both in taxpayer costs and what work will be completed if voters approve the sales tax,” said Rick Hoppe, chief of staff to Mayor Chris Beutler, and Miki Esposito, Transportation and Utilities Department director, in email responses to questions raised by Katt.
All the information in the educational campaign is reviewed by the City Attorney’s office to make sure the city is complying with state law, according to the written answers.
Lincoln Public Schools has not paid a consultant for an educational campaign for a bond issue, said Mary Kay Roth, director of communications for LPS.
LPS staff do prepare educational information and material for the district website and for presentations in the community, Roth said.
The city did not use outside consultants before the 2015 vote on the three-year, quarter-cent sales tax that was dedicated to buying a new emergency radio service and building four fire stations.
A website providing information on that ballot issue was handled by city staff.
Katt said he also disagrees with the quarter-cent plan itself. That money -- about $13 million a year for six years -- will be used to maintain residential and arterial streets and build new or widen arterial streets.
Katt suggests the city should not build an elevated roundabout, planned for 14th Street, Old Cheney Road and Warlick Boulevard, and instead should spend that $40 million on maintaining residential streets.
The city builds streets that are more expensive than necessary, according to Katt.
"I want Lincoln to be better. We need better roads. But we need to make better choices on what roads we build and how we build them," said Katt. "The current culture in city hall has got to change."
Katt said he is interested in this bond issue vote because "it is better to do the hard work to fix the problems in city hall than to throw more money at the problems."
The city funding for the educational effort, up to $190,000, is general fund tax dollars, which is property and sales tax revenue.
The money pays for contracts with two private companies — Olsson, a Lincoln firm, and Bullhorn Communications in Omaha.
Olsson did the research and educational work for the task force that looked at street funding issues in 2017 and paved the way for the quarter-cent plan. The city will pay Olsson up to $93,000 for work on the educational campaign, according to Hoppe.
The scope of this work, which includes open houses, graphic material and design work, may be reduced, Hoppe said.
Bullhorn’s work, up to $160,000, includes creating, producing and placing public service announcements on radio and TV.
The Bullhorn contract says the money will be used for "professional assistance to provide advertising strategy, consulting and production services in regard to the city's public education campaign ..."
The specific contracts, signed by the mayor, are not required to be approved by the Lincoln City Council.
Mayor candidate Cyndi Lamm and City Council candidate Cassey Lottman have also questioned the city’s educational campaign.
"When Lincoln is $536 million in debt and is paying $53 million in debt service each year, we need to be mindful of how we spend every penny," said Lamm, who will oppose the quarter-cent tax hike plan. "The city should not be spending $187,000 on a campaign to raise taxes on our citizens."
Lottman, a candidate for the northwest Lincoln council seat, is also undecided about the quarter-cent increase, but she doesn’t think the city is providing all the information about the proposal.
The flyer in the water bill does not mention that the proposal would freeze the city's impact fee at the 2018 rate for five years and that raises the question about the educational campaign's neutrality, Lottman said in a news release sent Wednesday.
“Leaving out information that’s crucial to deciding whether this is a good deal for taxpayers is a glaring oversight,” Lottman said. “It’s possible this is a great compromise — and business groups and property developers seem to believe so. But voters need all the information about what’s at stake in order to make an informed decision.”
A private coalition, the Fix Lincoln Streets Now Coalition, has been formed to support the ballot issue.
That group, which includes business organizations, neighborhood groups and individuals, is separate from the city educational campaign, though Beutler is raising money for that private campaign on his personal time.
"It is a private effort and totally separate from the city’s efforts," said Dan Parsons, who is running the campaign.