Omaha Mayor Jim Suttle says a budget shortfall created by the new labor agreement with the city's fire union is larger than expected.
Revenue from the city's restaurant tax may end up footing part of the bill.
The City of Omaha now must find $7.3 million to cover unanticipated costs of the City Council-negotiated labor agreement, Suttle's office said Monday.
Suttle will ask the council today to transfer roughly $5 million in restaurant tax revenue earmarked for the city's police and fire pension fund to cover part of the shortfall. The new fire contract already puts the troubled pension fund on a path to solvency.
Councilwoman Jean Stothert, head of a council committee that negotiated with the fire union, said she didn't believe Suttle's claims on the extent of the shortfall. Council members will be asking for a full accounting of the forecasted budget shortfall, she said. “We have no idea where he's coming up with this number,” Stothert said. Last month, Suttle's office said a nearly $6 million shortfall in the 2013 budget would result from higher-than-expected wage increases and a new obligation to give dozens of firefighters paramedic training.
The latest shortfall figure comes from revised forecasts on salary and overtime expenses linked to the new contract, the mayor's spokeswoman said Monday.
“It's unfortunate that the funds allocated to reduce pension costs are needed to make up for a shortfall, but we made a choice to support pension solvency for the long term, and that means helping the City Council find an answer for this short-term expense,” Suttle said in a statement.
The city's 2013 budget earmarks $5.2 million in a contingency fund to use for additional pension contributions. City finance officials have said much of the city's restaurant tax — which is forecast to generate $25.6 million this year — previously went to the city's police and fire pension fund.
Suttle's office said the remaining 2013 shortfall, $2.1 million, could be addressed by finding savings in the city budget through the year.
“It doesn't all have to be done this minute. It just all can't be lingering out there until the last moment,” said Aida Amoura, Suttle's spokeswoman.
Stothert said the council could use money earmarked for the pension to erase much of any shortfall, if calculations by Suttle's office were correct.
Leslie Schaefer, the city's interim finance director, is scheduled to meet with council members today to discuss the impact of the fire contract on the city budget.
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