Mayor Chris Beutler today addressed misunderstandings about the City's budget, saying the City Finance Department provided correct figures to City Council members, and allegations that money is missing are not true. The first year of the biennium ended August 31, and the Mayor last week signed three budget resolutions passed by the City Council. The Council is expected to discuss the budget again at its regular meeting Monday, September 14.
"The budget is very complicated and an attempt to boil it down to simple sound bites doesn't give a full and accurate picture," Beutler said.
At issue is the "rollover savings," known as re-appropriated funds. Some Council members attempted to cut $1.9 million from the $7.9 million of re-appropriated funds in order to cut the property tax levy. However, the $7.9 million is listed as an "up to" amount. It is an early and preliminary estimate of rollover savings provided by departments. The figure is lowered when final year-end figures are available. The Finance Department now estimates the final number will be less than $5 million.
Some critics argue that the $7.9 million number was in error. But that preliminary estimate is part of a long-standing procedure that encourages City departments to save money, according to City Finance Director and Budget Officer Steve Hubka. He said the re-appropriation process used this year has been standard operating procedure for the 26 years he has served as Budget Officer.
"By allowing departments to set their savings goals high and rollover whatever they can save to the next year, it encourages them to tightly manage their spending," Hubka said. "This prevents a 'use it or lose it' situation in which departments are encouraged to spend all their potential savings before the budget year ends. That isn't prudent management of tax dollars." Departments cannot use reappropriated funds to start new ongoing programs, and their use must be approved by the Finance Department and the Mayor.
"What is being called a Budget Office mistake is not a mistake at all, but rather the continuation of a sensible budget practice that encourages City departments to save money for important one-time expenditures like the police firing range," Beutler explained. "There is no money missing. The $2.9 million difference between projected and actual amounts was spent in the 2014-15 budget on public safety, economic development, parks, libraries and more, exactly as authorized by the Mayor and City Council.
“Steve Hubka is one of the most talented people in City government and has a sterling reputation for budget accuracy,” Mayor Beutler said. “Lincoln has been ranked as a top five best managed city for three years in a row. We have the highest possible bond ratings, reserved only for communities that manage their finances well. We achieved these successes because of the commitment of Steve and his staff to prudent and accurate budgeting.
“I remain opposed to making a major change like a tax levy reduction in the middle of the biennium,” Beutler said. “A major budget change that impacts the future of our community must be considered thoughtfully and be subject to full and open public discussion, particularly as it may have a major impact on services Lincoln residents want such as parks, pools and libraries.”