Local budgets take on daunting circumstances

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August 5th, 2011

Omaha, NE- In Washington, lawmakers are searching for ways to cut spending in order to balance the books. And that could mean cuts to state aid. Now, city officials in Nebraska and Iowa are faced with not only aid cuts, but budget issues ranging from flooding to immigration. Expected or unexpected, all have left their mark on budget bottom lines.

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This summer Eastern Nebraska and Western Iowa have been soaked by historic, extensive flooding. As the Mighty Missouri begins to slowly recede, it leaves behind not only expensive property damage, but huge unforeseen expenses, just as local administrations are preparing their 2012 budgets.

Blair Finance Director, Rod Storm, said the flooding has cost his city around $800,000. Pair this with a $70,000 cut in state aid, Hill said administrators will have to brace for leaner times.

Cities affected by the Missouri River flooding are counting on FEMA to reimburse most of the flooding expenses to help their budgets. (Photo by Lindsey Peterson)

“We’re just tightening our belt and there will be less projects that we would be looking at doing this year,” Storm said, “Some of the projects that we would be looking at putting funds aside for, for future, will be delayed a few years.”

Storm said Blair is hopeful, if not dependent, on a 75 percent reimbursement from FEMA. “If that doesn’t come, future years will look pretty bleak,” Storm said. “As far as what is going to be accomplished and how long it will take to complete the recovery, and clean up, and repair of the damages from this summer.”

Across the river in Council Bluffs, Finance Director Art Hill, paints a more optimistic view of Council Bluffs’ budget.

“The gaming business in Council Bluffs … was only off by less than one percent from where last year was,” Hill said. “Given what was happening along the river, we see that was a positive, and we still continue to see good sales tax activity in the community,” he said. “So the flooding and the costs associated with it really is the only major item that we see that might have negative impact on our planning for next year.”

Like Blair, Hill said Council Bluffs is hopeful that 75 percent of their $8.5 million spent so far in debris removal and emergency response costs will be covered by FEMA. And he hopes that will offset any potential cuts, tax increases or layoffs.

Council Bluffs also has the benefit of time. Their final budget for next year isn’t due until March, giving administrators more time to assess the damages as the river recedes.

Last month in Omaha, Mayor Jim Suttle unveiled his recommended budget for next year. While the budget grew more than $70 million above last year, Mayor Suttle revealed that no new taxes are in order.

Much like Blair, Omaha received a $3.5 million dollar cut in state aid. To date, Omaha has spent roughly $5 million on flood efforts, and the mayor’s office believes those expenses will be eligible for NEMA and FEMA assistance.

Iowa Finance Director, Art Hill, says Iowa's gaming revenue is down only one percent from last year. (Photo credit to Wikimedia Commons)

Earlier this week, Moody’s Investors Service notified Omaha that its credit rating will be reviewed, along with 177 other cities. That’s due to the review of the U.S. Government’s AAA credit rating. A lowering of Omaha’s credit rating could put millions of dollars at risk, said Mayor Suttle’s Director of Communications, Aida Amoura.

Up north, Fremont, Nebraska is facing a $700,000 gap in its city budget. But that is largely to do with unexpected legal fees.

Fremont is having to budget not for natural disasters but for time in the courtroom. The immigration ordinance passed last summer was suspended and now is held up in U.S. District Court.

In last year’s budget, the City of Fremont included $750,000 in total projected legal fees. That raised property taxes by 5.8 mills. But for next year, Fremont Director of Finance Jody Sanders said she hopes to bring down those costs to $375,000.

“This is designed as a kind of a, if you will, war chest,” said Sanders. “We have a reserve available if it goes against us and we are then required to pay the plaintiff’s fee. If there should be some kind of settlement costs or damages we’d have to pay. That’s what this is designed for.”

Sanders said she hopes property taxes will drop next fiscal year. But that will depend on new property valuations.

So while Washington works on filling its gap in the federal budget, local administrations are hoping federal and state governments can help keep their own budgets in the black.

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