Friday, January 21, 2011 – Legislative Chambers
Good Morning. My thanks to all of you for being here today.
Harry Truman once said a pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities out of his difficulties. I am that optimist who has stepped into a difficult situation and created real opportunities for productive change in Omaha during tough economic times.
I am here today to report on the condition of our City, to look at the progress we’ve made in the last year and to share my administration’s plans for the year ahead knowing that there is a chance those plans may not be put into place.
I’m in an unusual position standing before you today.
• We are poised to pull out of this recession in better shape than most cities across the country.
• We have restored fiscal stability to Omaha for the first time in years.
• We are balancing budgets, mending broken pension systems and saving Omaha taxpayers millions of dollars.
The reality is that the financiaI stability we have secured in the last 20 months could unravel if our city faces a series of leadership changes in the months to come.
This is a critical time for our city, and instability would hurt our chances for economic recovery. We need to be building on the progress we’ve made.
I’d like to share;
• where we are,
• what brought us to this point
• and, how we as a community can continue to work together to make Omaha the best place to live.
Preliminary yearend financial reports for 2010 hold excellent news for Omaha taxpayers!
Although we were hit with some unplanned expenses, city departments were diligent about spending cuts and the results were far better than expected. The city saved close to $16 million dollars with wage and hiring freezes, cuts in healthcare costs and a spending freeze throughout city government.
We are in the black with a small surplus which will help prevent further cuts in services or the need to expand our revenue base to pay the city’s bills in the year ahead.
This is possible because we cut spending, staffing and benefits within each of our city departments. This is possible because we streamlined our government operations and implemented efficiencies in city services. This is possible because we paid overdue bills and worked to repair pension systems, which allowed us to get our AAA bond rating back. This is possible because we instituted performance based budgeting in our City Departments. It has taken 20 months of hard work to get where we are today.
Many cities throughout the country are struggling with serious financial problems, created by city leaders failing to make tough choices, failing to balance budgets, and failing to fix broken pensions systems. It’s now costing taxpayers in those cities hundreds of millions of dollars. Just this week, Camden, New Jersey, Oakland, California, and Tulsa, Oklahoma are laying off firefighters and police officers. These cities are not only struggling financially, but are also putting the safety of their communities at risk. Underfunded pension plans are crippling many municipalities in this country, who are now facing cuts in essential city services or making significant increases in taxes to meet ballooning retirement costs.
It’s because we faced these problems head on, that we are not in a financial crisis and are no longer in jeopardy of losing vital city services.
I am the first Mayor in 30 years to convince Omaha city employees to give up portions of their salaries, benefits and pensions promised to them in contracts signed by former administrations. It’s not as easy as some would lead you to believe. Threats will not encourage anyone to reach in their pockets and give back money they were promised in the past. We cannot tear up our contractual obligations to those who have agreed to protect and serve our community. I recognize that past administrations promised too much, but it is illegal to tear up contracts and yank pensions away entirely….What we can and have done is negotiate with civilian employees, police and firefighters to give back millions of dollars in benefits to the city and adjust past offers to a reasonable level.
With our police contract;
• the retirement age was raised to 50 and 55
• police agreed to freeze their wages in 2009 and 2010 saving 4 to 5 million dollars
• they agreed to cut their benefits at a level that will save the city nearly 13 million dollars a year
• and they also agreed to end “spiking”
City employees and retirees negotiated cuts in healthcare benefits saving the city between 800-thousand to a million dollars a year. We reduced the number of healthcare plans the City administers from 34 to only 3 plans, cutting administrative costs.
Our goal is to eventually have just one healthcare plan for all employees, and we will get there.
If we did not act now, in 4 years 50% of the city’s general fund budget would be paying healthcare costs, under more expensive plans, for individuals no longer working in city government.
Our Fire Department was expected to be about 3 million dollars over budget this year and with the help of performance based budgeting, they are $400,000 under budget for the first time in years.
Since I’ve been in office the Fire Department has reduced its spending by more than 6 million dollars.
I have not given up on negotiating with firefighters and working with the City Council to reach an agreement on a fire contract that would stabilize the pension system and save taxpayers millions of dollars in benefit reductions and reorganization.
The debate over union contracts is often filled with heated rhetoric and misleading statements, but the only way to achieve savings for the taxpayers is at the bargaining table, working with the unions to achieve a fair deal for everyone.
Only by keeping the dialogue open and working together, will all sides win in this debate.
If I had not restored our AAA bond rating we would be at a disadvantage today.
We would have trouble selling bonds to pay for city projects—which is happening in many cities across the country.
Instead, Moody’s, a national credit agency pointed to the management of our city’s finances as a key reason for restoring and reaffirming our AAA rating just a couple of months ago.
We also saw a drop in our interest rate to a record low of 2.7 percent, which is saving the city around 6 million dollars over the life of the bonds and will continue to save taxpayers millions in the future.
Moody’s and Standard and Poor’s said that Omaha’s lean, but adequate financial position, revenue enhancements, and our ability to manage our long term pension and retiree benefit liabilities were reasons for giving us our AAA rating.
We raised revenue to overcome a 34 million dollar shortfall in our budget this year. It was not an easy decision to make.
If we waited until the economy was better, we wouldn’t have kept our AAA bond rating, our interest rates would be higher and we would be looking at bigger payments entering this new budget cycle and in the years to follow.
Delaying an increase in revenue by holding off on inevitable expenses, ignoring decades of infrastructure concerns and waiting on pension reform, may have been a safer political move for Jim Suttle, but it would have cost taxpayers more in the long run and I was not comfortable with that.
The fact is problems were pushed aside for decades and some form of tax increase was inevitable regardless who was Mayor. It was the only fiscally responsible thing to do. I worked to keep the increases to a minimum so that someone living in a 100,000 dollar home only would pay around 25 dollars a year extra in property taxes.
I understand the impact taxes and other expenses have on families and businesses, and I will continue to keep this concern at the forefront as we hold the line on spending.
What we have done is restore fiscal stability to the city and establish a foundation for our city to make its way out of a bad economy and move to prosperity.
We have put our fiscal house in order.
We are also restoring order, stability and safety to our neighborhoods.
As Mayor of Omaha I have stressed the three E’s, Education, Employment and Enforcement. Our work in these areas is paying off as we enter 2011.
I am committed to supporting partnerships between job training providers, and local employers looking for skilled individuals who can fill available positions in their companies.
With the help of partners like:
• the Greater Omaha Chamber of Commerce,
• the State,
• United Way of the Midlands,
• Metropolitan Community College,
• other educational institutions and non-profits
• as well as many of our excellent businesses
We have established a collaborative initiative called Heartland Workforce Solutions.
I am confidence this program will do a better job of meeting the needs of the unemployed and underemployed in our city.
We are also focused on keeping kids in school with assistance from the city’s truancy initiative and summer jobs programs.
We will be reporting on the progress of these programs in the months to come, especially since we are finding that the link between education and job training is having an impact on reducing crime in Omaha.
Our latest crime statistics indicate that a combination of crime prevention, mentoring, enforcement and education are getting gang members off the street and providing job opportunities to those who may otherwise turn to criminal activity. Since I took office, we have curtailed gang activity in certain areas; there has been an overall reduction in violent crime and we have seen significant declines in sexual assault (down 33%), felony assaults (down 35%) and robberies (down 45%). We will continue to do everything we can to keep illegal guns off the streets.
In order to ensure the preservation of the city’s recreational facilities for our young people and their families, another public-private partnership has been developed.
The newly established Omaha Parks Foundation is working with our Parks Department to identify needs in our recreational facilities and supplement public resources with private funds in order to enhance the quality of our park system. Having people outside city government interested in maintaining, updating, and growing our city parks, will ensure the preservation of our recreational facilities now and in the future.
Our Library system continues to have strong community support. Library use has increased by more than 4% percent this year with almost 2 and a half million visitors spending time in their local branches. Libraries in North Omaha are seeing as much as a 27% increase in visits by people who are getting assistance applying for jobs on line and children who are doing better in school because of the afterschool and summer programs available to them.
I’ve talked about Omaha being a destination city and we are making that happen. Last year 250-thousand people traveled to Omaha and spent money taking advantage of the many wonderful things we have to offer like our restaurants, museums, and various shopping venues. Almost half a million visitors from 168 different countries and all 50 states visited the city’s tourism Web site.
As people make their way to Omaha to visit or to stay we are looking at developing a new Transportation Master Plan for the future to ensure their mobility in all areas of this growing community are satisfied. We are focused on long-term sustainable developments that look at whole systems which can meet our needs today and still be effective 25 years into the future. Transportation connects our community and we want to see policies providing choices in mobility to the citizens of Omaha. The goal is to determine the most effective and efficient choices for moving people throughout our city.
Since this is the season of snow, I would be remiss if I did not talk about our new snow plan for the city. So far so good! Our first major snow storm this year went very well. This plan allows us to take care of the major streets and our residential areas at the same time.
After the first major snowfall last year we had more than 4-thousand calls to our hotline, 90% of which were complaints. This year we had less than 2000 calls and 90% were complimenting the city for a job well done.
Let’s look at where we want to go… keeping in mind the uncertainties we face in the week ahead.
We are beginning to see the fruits of our labor as we work with the Greater Omaha Chamber of Commerce to bring business to Omaha. This week we had an Atlanta security firm announce the opening of a regional headquarters in North Omaha. With this business venture comes 100 jobs and the potential for more employment opportunities in the future. Chamber President David Brown has included me in recruitment efforts in California where six businesses are seriously considering Omaha as the place for them to move or expand their business.
It is my hope to continue that effort as well as our job training initiatives which match employers with locally skilled employees.
Our collaborative efforts with the Greater Omaha Chamber of Commerce since I have been in office created almost 500 new and expanding businesses, employed 7000 people and brought in more than half a billion dollars in new business investments to our city.
All this being said – I will continue to emphasize the need for employment opportunities. It’s how we will progress as a community. It’s how we will set goals for our children and keep our neighborhoods safe.
Another building block for the future of our city is civic engagement. When citizens get involved in volunteer service we strengthen our community. Helping others breaks down barriers and brings our community together for the greater good of this City we all love.
People outside our city limits are noticing the progress we have made. We are topping a number of lists. Omaha is among the 100 best communities for young people. We are ranked number one when it comes to the cost of doing business and this month Forbes listed Omaha as the most affordable city in the country.
We have maneuvered through the rough waters, our fiscal house is in order and we are positioned to make more opportunities available to those needing jobs in Omaha.
There is light at the end of tunnel if we pull together as a community and continue moving our great city forward.
Thank you.
