Pain seen in budget cuts

The $11 million spending cut that the City of Omaha must make for 2010 amounts to just 2 percent of the half-billion dollars it costs to run the city. Put that way, it doesn't sound like much of a cut.

But to understand what city officials face, consider your own finances.

If you had to cut 2 percent of your spending, you couldn't just trim all your costs across the board. Your mortgage or rent payment is set in stone. You'd still have to put gas in your car, no matter what happens to the price. And getting out of your pricey cell phone contract might cost a lot in penalties.

Because of that, you'd have to cut deeper in other, more discretionary parts of the family budget — maybe eliminating vacations or movies.

Omaha's $564 million budget works the same way. City officials have committed to do a number of expensive things and can't change them easily. That might mean deeper cuts to services such as libraries and pools.

“That's a good way to think about it,” said Carol Ebdon, the city's finance director. “So much of what we do is mandatory, mostly due to contractual or legal obligations. So there's a limited amount of discretionary spending available. As we have had to make cuts over the last several years, those are the areas that have already been hit hard.”

Mayor Jim Suttle, who will offer his 2010 budget proposal to the City Council in a week, has suggested that Omaha might need to increase taxes to offset flat or declining property and sales tax revenue.

But City Council members have been cool to that idea, and some of the proposed tax hikes would require approval from the Nebraska Legislature.

If city officials were to find the entire $11 million in budget cuts, nearly all would involve the city's $280 million general fund.

The other half of the budget is locked into funds dedicated to specific purposes, such as sewer and street repairs or debt payments on past bond issues. Most of that money can't be shifted into the general fund.

So spending less to fill potholes — even if that was a good idea — couldn't help fill the hole in the general fund.

Within the general fund, 72 percent of the spending is for personnel costs. Suttle is negotiating with the city's police, fire and civilian unions on a wage freeze. The potential 2010 savings haven't been disclosed, but a similar freeze for 2009 would save $5 million.

Since 2001, the number of city employees has dropped 1.7 percent overall. Civilian employment went down 13 percent, while police and fire employment rose by nearly 11 percent.

Total police and fire budgets have increased 38 percent since 2001. The rest of the general fund budget has gone up 15 percent, compared with a 21 percent rise in the cost of living.

Ebdon said public safety spending went up the most because former Mayor Mike Fahey and council members viewed that as the city's top priority.

A portion of general fund spending is tied up in contracts and other obligations approved by past mayors and City Councils, which Suttle can't undo unilaterally. Some of those commitments might be altered to save money, but the negotiation process could be complex and time-consuming.

“We can't renege on contracts,” said Ron Gerard, Suttle's spokesman. “We need to make these decisions quickly and make the best decisions, and we don't have the luxury of time.”

That's not to say Suttle and the City Council have nothing to cut. Administration officials last month came up with $11 million in possible cuts that included ending yard waste pickup, not replacing police cruisers, not hiring police recruits to replace retiring officers and closing three library branches.

Here's a look at city departments, their 2009 spending levels and their budget-cutting prospects:

General government: $11.7 million

Covers the Mayor's Office, City Council, City Clerk's Office, prosecutors and other city attorneys, human resources, budget and payroll functions.

City officials say funding for these areas already is tight, with total spending rising just 5 percent since 2001, even though wages, health care benefits and other costs have climbed at a much faster rate.

Fire: $69.1 million

The fire contract requires many specific staffing details, such as the number of firefighters at each rank and on each truck. Unless the contract is changed, Ebdon said, 94 percent of the fire budget is effectively off-limits from cuts.

The remainder — $4.2 million — is mainly medical and firefighting supplies or gasoline for trucks.

Police: $94 million

Possible cuts include eliminating recruit classes ($3.5 million) and not buying replacement cruisers ($700,000). Most other funding is tied up in salary and benefits to current officers and civilian workers.

Unless layoffs are made, it will be hard to save much more money.

Public works: $15.4 million

Nearly all of this budget goes for contracted trash collection. Street and sewer expenses are funded outside the general fund, so cuts in these areas would not affect the general fund shortfall. City officials are considering an end to yard waste collection, which might reduce collection costs by $4 million a year.

Parks, recreation and public property: $18.6 million

Possible cuts include less-frequent mowing of parks — saving $500,000 — and closing some pools, community centers, or Sun Dawgs youth recreation sites — another $500,000 in savings. Earlier this year, the city closed two pools.

Planning: $6.5 million

About half is for administering building permits and inspecting construction work, which is funded through fees charged to contractors. Of the rest, $1.4 million goes to neighborhood and community development efforts, the same amount as in 2001. Currently, $1.2 million goes to inspections of substandard housing, up 41 percent from the $853,000 in 2001. Code enforcement was beefed up by Fahey and the council.

Library: $8.6 million

Possible cuts include closing branches, reducing hours or spending less on new materials. The materials budget has remained the same since 2001, about $1.6 million.

In 2004, a proposal to close the Swanson Library would have saved $500,000. Earlier this summer, the city said it could save $1 million by closing three branches.

Convention and tourism: $500,000

Suttle already scrapped this funding for 2009 and proposes doing the same in 2010. The convention bureau still has a $3 million annual budget from other revenue sources.

Other accounts: $56.2 million

A catchall category of city obligations: retiree health insurance, workers' compensation, money owed to Douglas County for jail and 911 services, payments under lease-purchase agreements, and so on. Most cannot be easily changed.

Because this category is where the city sets aside money for possible wage hikes, savings from a wage freeze would show up here.

Beyond the general fund: $284 million.

City officials can seek savings elsewhere in Omaha's budget, from golf operations to debt service. But most of those savings would have no impact on the $11 million general fund shortfall, because the money can't be shifted.

A key exception includes the $3.4 million in keno revenue that Omaha distributes to various nonprofit groups. By law, the money must be used for community betterment, which would let Omaha tap it for some city spending.

The biggest current recipient is the Henry Doorly Zoo, which gets $1.55 million a year under a contract that runs through 2010. The Humane Society receives $650,000 to provide animal control services to the city, although the terms of that contract could change next year.

Contributions to other groups could be changed or scrapped entirely. The largest of those is the Durham Museum, which gets $200,000. Others include Joslyn Art Museum ($150,000), Clean-up Omaha ($120,000) and Lauritzen Gardens ($100,000).

Contact the writer:

444-1149, tom.shaw@owh.com