January 20, 2011 – Mayor Jim Suttle is proud to announce the 2010 preliminary financial results for the City of Omaha today. After concerns about ending the year with a shortfall due to unexpected expenditures not planned for in this year’s budget, the city appears to be in the black. According to City Finance Director Pam Spaccarotella, greater than expected savings due to wage and hiring freezes, cuts in healthcare costs and a spending freeze in city government contributed to the city’s positive financial results.
The City of Omaha has faced many financial challenges over the past year. The city’s first quarter results indicated the city was facing a $12.3 million shortfall. The shortfall was revised during the second quarter to $4.6 million, and again to $644,000 in the third quarter. Over the past 12 months, the city experienced unbudgeted expenses of approximately $16 million. These expenses included: police back pay, increased costs for firemen as a result of the CIR decision, pension contributions to solve the unfunded pension liability, increased legal fees, sick and annual payouts, workers’ compensation costs, and a significant increased in vehicle maintenance expenses as a result of the city’s aging fleet. Revenues also continued to decline in the areas most impacted by the recession, including building permits and fees, interest income, and business occupation taxes.
In order to minimize the financial impact of these items, Mayor Suttle and his staff instituted hiring and spending freezes, wage freezes for all bargaining units, and reduced health care costs where possible. As a result of these decisions, all city departments will end the year under budget except Human Rights & Relations and the Police Department. The city has saved approximately $7.6 million as a result of the hiring freeze – leaving approximately 218 positions unfilled through most of 2010, 74 of which were in the Fire Department and 69 in the Police Department. Heath care costs were below budget by approximately $5.4 million, and spending restrictions on city purchases accounted for an additional $3 million in savings. The restaurant tax – enacted during the 2011 budget process – has contributed $4.2 million to the city’s finances since October 1st, helping to offset these declining revenues.
Mayor Suttle is dedicated to maintaining the city’s restored fiscal stability. “Hard decisions had to be made but today’s numbers show the positive results of those choices. The City of Omaha is once again financially secure and poised to lead the nation out of the recession,” said Mayor Suttle.
