Facing a historic, pandemic-induced drop in sales tax revenue, Lincoln Mayor Leirion Gaylor Baird proposes closing a $12 million shortfall in the upcoming city budget largely through department cuts and fee increases.
Libraries would offer one less day of service each week. Wages for some city employees would freeze. And some fees paid by city parks program users and collected by utility companies would increase.
Gaylor Baird would delay city vehicle replacements, cut sidewalk repair money in half and curtail spending on parks improvements and tree replacement in the fight against the emerald ash borer.
"This was an exercise in choosing between a bunch of undesirable options," Gaylor Baird said Friday in unveiling a one-year $210 million tax-funded budget to reporters.
Her budget solution leaves property taxes untouched, and Gaylor Baird would seek minimal cuts to public safety, health and other pandemic services she deems essential.
Under her plan, the city would accelerate the police department's effort to equip all officers with body cameras, add six employees to the public health department, promote proactive enforcement of housing codes, open three new parks and put $73 million toward street repairs and improvements.
The first-term Democrat, a former Lincoln City Council member and city of San Francisco budget analyst, called it the most challenging budget she's worked on.
"Pandemic threats to public health and our economy have certainly shaped this budget in ways we hadn't anticipated, but the values and the vision are the same," Gaylor Baird said.
Directed health measure restrictions that closed some businesses and limited the operations of others beginning in March cut down spending in the city and hammered the city's largest revenue source: sales tax.
These funds comprise 47% of the city's general fund, the biggest account and the one where the mayor and council members hold the most discretion over spending.
Last month, city officials projected the city could face a $17 million shortfall in its budget as sales tax revenues lagged, but updated March figures led city finance staff to revise its estimate to a $12 million shortfall, Gaylor Baird said.
Those projections assume April figures will be worse, and data from the state showing just how bad the month proved for sales tax collections should come in later this month, she said.
With the full economic effects of the pandemic still unclear, she chose to recommend only a one-year budget and not the typical two-year plan mayors craft.
"This year, we don't know what to anticipate," Gaylor Baird said.
But it's clear to her administration the pandemic's demands on the Lincoln-Lancaster County Health Department should be addressed in their ongoing efforts to assure public health, she said.
Gaylor Baird would seek to add six employees to the Health Department, including two public health nurses, an epidemiologist, a public information officer and an environmental health specialist.
A police accountability measure marked the first funding priority Gaylor Baird outlined at Friday's briefing.
Lincoln police had begun equipping officers with body cameras in a phased approach, one geographic team at a time to manage the cost.
But Gaylor Baird said she wants to fully implement the program, at a cost of $500,000 to buy the cameras and related technology and an annual cost of $300,000 to store and have staff review the video, she said.
"It's a really expensive thing for us to undertake, but we have to do that," Gaylor Baird said.
The mayor has also included funding to help expand support for the police department's partnership with the Mental Health Association and pay for an additional sexual assault investigator, she said.
Money would be spent to continue repairs on Lincoln's wellfields near Ashland damaged in the 2019 floods and to replace 7 miles of water mains. Road work would be focused on 5½ miles of arterials and 170 blocks of residential streets.
Building and Safety Department staff would ramp up proactive enforcement of housing code violations and work with property managers to fix problems and improve the city's housing stock, the mayor said.
Improvements to renew the West O Street corridor and streetscape work to enhance the attractiveness of the Haymarket South area will remain a priority, she said.
Totaling nearly $8 million, department cuts are the mayor's main approach to addressing the shortfall.
About $2.5 million in interest earnings is typically used by departments like Lincoln Transportation and Utilities to fund items in their budgets. Rather than allowing them to use that money, Gaylor Baird is seeking to plug the budget gap with that money instead.
Most visible to residents, scaling back service at the city's library branches would save nearly $900,000, Gaylor Baird said.
Libraries have been closed to the public since mid-March due to the pandemic.
Department directors across city government would also be asked to delay hiring when jobs are open for a total savings of $1.4 million.
Next year's budget will fund fewer city employees than in 2006 even though the city has grown by nearly 45,000 people, she said.
The mayor recommends that some city workers forgo the usual cost-of-living raise received annually, saving the city about $670,000. Negotiations with five of the six unions representing city workers are ongoing with only Lincoln police officers having a current contract.
Her administration will also look to establish a furlough policy while negotiating with city unions in case it would need to further limit spending on personnel next year, the mayor said.
Parks and recreation fees would rise, including a $65 hike for adult basketball leagues and a $5 increase on picnic shelter rentals.
The largest non-tax revenue increases would come from changes to the agreements the city has with Lincoln Electric System for the ownership of the utility and to the agreement allowing Black Hills Energy to operate its natural gas system in the city.
The proposed LES change would add an estimated 20 cents to a residential customer's bill.
The city's new 20-year agreement with Black Hills Energy updates a 26-year-old agreement and would raise the franchise fees paid by commercial and industrial customers.
For residential customers, it is expected it would add 86 cents to a monthly natural gas bill.
The mayor would also seek to pay off some of the city's bond debt early to save $534,000.
Gaylor Baird will formally present her budget to the Lincoln City Council at an afternoon meeting Monday.
For four council members, it will be their first time through a full city budget process.
Council members will host a series of meetings with department directors before a public hearing on Aug. 3. Final changes will be voted on later in August with the budget set to be adopted Aug. 24.
"This budget is going to continue to bake over the next few months," Gaylor Baird said.
For Lincoln property taxpayers, the city receives about $16 of every $100 paid in property tax. The largest share of that bill, 61%, goes to Lincoln Public Schools.
Chief of staff Jennifer Brinkman said small groups of City Council members have been briefed on the largest changes in the city's budget.
City Councilman Roy Christensen, a Republican who's the longest serving council member, agrees with Gaylor Baird's one-year approach to the city budget as a prudent way to avoid dramatic cuts until more information about the effects of the pandemic become clear.
In May, Gaylor Baird froze hiring, halted employee travel outside the area and took other measures to shore up the city's current budget in preparation for a $5 million shortfall.
Lincoln's Finance Director Brandon Kauffman said Friday the city likely would need to draw on its cash reserves to balance its books for the current fiscal year.
Christensen, who has criticized the use of the cash reserve in previous budgets, said he agrees with the use of the money this year.
"If there's ever a need for the cash reserve, it looks like it's now," Christensen said.
Reach the writer at 402-473-2657 or email@example.com.
On Twitter @LJSRileyJohnson.
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