City of Lincoln

Mayor’s Recommended Budget 2010-2011

Outcome-based budgeting

Achieve Results

In early 2008, the City began a transition to outcome- based budgeting.

This new approach is being used to help us focus on achieving desired goals for the future.

We measure success...

with outcome-based budgeting.

Lincoln’s focus for 2010-2011

Maintain our quality of life

Strategic Priority #1:

Lincoln is a national leader

#1 – Job prospects – Manpower 2009#2 –Best prospects for housing recovery – Forbes 2009#4 – Best places to raise a family – Children’s Health 2009#5 – Best places for business and careers – Forbes 2010

#9 – Most livable cities – Forbes 2010

LINCOLN’S NATIONAL RATINGS

The City budget must support the quality of life that attracts new residents and new investment.

Support our local economy as the national economy recovers

Strategic Priority #2:

• Maintain infrastructure

• Invest in economic development

• Drive growth through arena

Maintain infrastructure

Over 20 miles of road rehabilitated from 2010 through 2012

Stevens Creek trunk sewer

Over 76,000 potholes filled since January 2010

Invest in economic development

• Development Services Center speeds process• Lincoln Partnership for Economic Development attracts new jobs and investments• Fast Forward Fund creates jobs

Lincoln Haymarket Arena

Economic Benefits of West Haymarket Development (first year of operation)• $350 million in public and private investments• Increased City sales tax revenue - $952,000• Increased property tax revenue - $1.7 millionSource: West Haymarket Development Economic Impact Analysis

Lincoln Haymarket Arena

New positions to be paid with revenues from the Joint Public Agency:• Assistant City Controller

• Assistant Purchasing Agent• Assistant City Attorney

Increase City sales tax revenues

Strategic Priority #3:

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

1994 1996 1998 2000 2002 2004 2006 2008 2010

Percentage change in sales tax

Growth in receipts has been abnormally low in recent years compared to earlier years.

Fiscal year ending August 31st of each year

3.29%

-0.57%

-2.65%

Year To

Date

1.21%

Flat or declining revenues

Mandated increased costs

Fewer and fewer places to cut

Lincoln’s budget challenges

1994 1996 1998 2000 2002 2004 2006 2008 2010$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

Fiscal year ending August 31st of each year

The City property tax rate has dropped 44.6% since 1993-1994.

City property tax rate

All tax rate increases since the 1994-1995 fiscal year have been approved for bond issues.

52.0 cents

28.8 cents

City tax-funded budget as a percentage of personal income

Source: Bureau of Economic Analysis/U.S. Department of Commerce

1991 1993 1995 1997 1999 2001 2003 2005 20071.00%

1.10%

1.20%

1.30%

1.40%

1.50%

1.60%

1.59%

1.49%1.47%

1.43%

1.35%

1.39%1.39%

1.42%

1.27%

0%

25%

50%

75%

100%

LPS and ESU #18

Lower Platte South NRD

Lancaster County

Southeast Community

College

City of Lincoln

97.90%91.10% 83.70%

75.11%

50.36%

Percent of levy authority used by taxing entities in Lincoln

Property tax levies for 15 largest Nebraska cities for 2009-2010

Bellevue

LaVistaNorth Platte

OmahaHastings

Papillion

South Sioux City

Fremont

BeatriceColumbus

LincolnGrand Island

Scottsbluff

NorfolkKearney

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

0.5550.524

0.4800.476

0.473

0.4050.389

0.3480.3260.329

0.2880.273

0.2140.197

0.149Sales Tax Rate:

1.5%

1.5%

1.5%

1.5%

1.0%

1.5%

1.5%

1.5%

1.5%

1.5%

1.5%

1.5%1.5%

1.5% 1.5%

Bellevue

Columbus

KearneyLaVista

NorfolkNorth Platte

OmahaHastings

Scottsbluff

Papillion

South Sioux City

Fremont

BeatriceLincoln

Grand Island

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

0.5550.5500.549

0.5240.497

0.4800.479

0.473

0.4370.405

0.389

0.3480.326

0.2880.273

Sales Tax Rate:

1.5%

1.5%1.5%

1.5%

1.5%

1.5% 1.0%1.5% 1.5% 1.5%

1.5% 1.5%1.5%

1.5%1.5%

Property tax levies for 15 largest Nebraska citiesadjusted for power grid rental revenue for 2009-2010

14.3%$431.82 85.7%

$2,586.10

Current year breakdown of property tax levy (2009-2010)

On a property valued at $150,000

City of Lincoln All other taxing entities

-2%

-1%

0%

1%

2%

3%

4%

5%

01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

Slowing growth of the property tax base(Does not include revaluations prior to 2009-2010)

Years:

-1.19%

Estimated+0.50%

Mandated Increased Costs:Commission on Industrial Relations (CIR)

All other costs, 30%

Personnel-related costs, 70%

Personnel costs make up about 70% of budget.

Labor Negotiations

LCEA

LMCEA

PAGE

LPU

IAFF

ATU

CITY BUDGET

LABOR CONTRACTS

• Parks and Recreation Department

- Community Learning Centers

- Before- and after-school programs• Aging Partners• Public Works & Utilities Department• Planning Department• Health Department• Reorganized the Affirmative Action function

Programs reorganized 2007-2010

% change since 2006-2007 -.7% -8.5% -5.8% 6.2%

6.2%

Doing more with less

Total Fire, Police, Other City Full-Time Lincoln’sFiscal Year 911 Employees Employees Equivalents Population Area

1990-1991 589 1,435 2,024 191,972 63.5 sq. miles

2006-2007 740 1,487 2,227 239,213 85.3 sq. miles

2010-2011 735 1,361 2,097 254,001 90.6 sq. miles

Mayor’s recommended budget in full-time equivalents (FTEs)2006-2007 through 2010-2011

5.8% of the City workforce has been cut in the last four budgets.

City staffing comparison

Estimated Net Positions Total

Fiscal Year (Eliminated)/Added Savings

2007-2010 (136)

($5,703,971)

2010-2011 6*

($19,026)

TOTAL: (130) ($5,722,997)

*Of the net increase of six positions, three are funded by the West Haymarket Joint Public Agency

Budget status 2010/2011 if we do nothing

Most lower prioritizedservices in Tiers 2 and 3 would not be funded without additional revenues and/or budget cuts.

Tier 1

Tier 2

Tier 3

• Maintain key Tier 2 and 3 programs at risk• Reduce lower priority program spending• Reorganize programs• Use “Rainy Day” and one-time funds• User fee cost recovery

How do we achieve Lincoln’s strategic objectives for 2010/2011 in the face of our budget challenges?

Rainy Day Fund

“…to provide a budget contingency which will help preserve City services in difficult economic times.”

Transfer $3.5 million of Special Assessment Fund balances to the Cash Reserve Fund (Rainy Day Fund) and use the Cash Reserve Fund for its adopted purpose:

Reduce currently mandated normal cost contribution by $300,000 for one year to delay impact of a one-time actuarial adjustment

• Change City Code to allow for delay• The annual contribution will still increase by

$191,838

Police and Fire Pension Fund

One-time funds

Reorganization from 2010/2011 budget

Cleaner Greener Lincoln energy savings programs will save $200,000

Forestry reorganization will save $160,000

Privatization and reorganization of parking enforcement saves $612,000 in the general fund

Reorganizing Human Rights saves $96,200

General fund program cuts and adjustments 2010/2011

• Willard Community Center $ 35,588• July 4th Celebration (one year private funding) $ 46,750• Star City Holiday Parade (one year private funding) $ 70,224• Municipal band concert $ 9,000• Mosquito control $ 11,918• StarTran neighborhood north & south routes $168,000• Reduce StarTran subsidy, change Ride for $7.50 to $10 $ 50,000• Middle School Resource Officers(officers moved to other duties, no officer cuts)

Non-program budget cuts 2010/2011

Fire Department - $75,000

Health Department - $42,000

Library Department - $31,000

Public Works & Utilities Department - $50,000

Police Department - $375,000 (delayed hiring, no officer cuts)

2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

100

200

300

400

500

600

508544

525456 496

547

491529

508453

Goal: Maintain a violent crime rate 25% under the average for similar-sized cities (555 offenses per 100,000 residents)

Police Department’s share of the budget compared to the reminder of the tax-funded budget has increased 6.6%

1990/1991 2010/20110%

10%20%30%40%50%60%70%80%90%

100%

Police Department Reminder of tax budget

20.6%

79.4%72.8%

27.2%

Police Department share of tax-funded budget 1990/1991 to 2010/2011

Many Police services performed by 64 officers: $3.5 million

Programs saved

Programs saved

Star City Shores, University Place, Woods and Highlands Pools: $133,000

Community parks (25 parks, 1700 acres): $1,170,281

Programs saved

Programs saved

Neighborhood parks (maintenance for 78 parks): $768,258

Community forestry program: $1,225,631

Programs saved

Healthy Homes Outreach

Programs saved

Helping women with high- risk pregnancies: $218,733

Programs saved

Park’s Therapeutic Recreation Program

Recreation programs for individuals with intellectual disabilities: $195,928

Recreation Center evening and weekend hours: $81,629

Programs saved

Programs saved

Kenneling contract with Capitol Humane Society: $450,000

Reductions to General Fund $2.0 million

One-time sources $3.8 million

User fee cost recovery $0.5 million

Funding transfer $656,600

Summary of financial changes 2010/2011

Changes in employee numbers 2010/2011 In full-time equivalents (FTEs)

Tax- funded

Non tax- funded FTE additions 12.74 12.95 25.69

FTE reductions (16.10) (4.03) (20.13)

2010/2011 change (3.36) 8.92 5.56

Fourth straight year the tax-funded budget has reduced employees

Total

Staffing changes in the last four budgets

Tax-funded positions eliminated 149Net positions eliminated 130Total savings overall $5.7

million Total savings in tax dollars $3.9

million

Capital Improvement

Program

$123,857,700

Tax-Funded Operating

Budget

$139,551,487

General Fund Capital Improvement Program

$150,600

Non-Tax-Funded Operating Budget

$117,586,850

Where the money goes

$0 $5 $10 $15 $20 $25 $30 $35 $40

City Council (0.2%)Bldg & Safety (0.2%)

Urban Dev. (0.7%)Personnel (0.8%)

Mayor's Dept. (0.9%)Law (1.4%)

Aging (1.6%)Planning (1.6%)Finance (2.7%)

Health (3.2%)Public Works (3.4%)

StarTran (3.8%)Library (5.4%)

Parks & Rec. (9.5%)Misc. & CIP (14.1%)

911 Center (1.7%)Other Safety (2.3%)

Fire & Rescue (19.4%)Police (27.0%)

Tax dollars by department

Millions

Safety & Security

Other Departments

Total Safety and Security = 50.5%

PRIORITY LINCOLN: Safety and Security was the highest rated priority.

Four year average change 1.87%

Mayor’s recommended budget 2010-2011 $139,702,087

Council-adopted2009-2010 budget $134,811,929

Dollar difference $4,890,158

Percentage change 3.63%

Summary of tax-funded budget changes