As she prepares to deliver her first State of the City address Wednesday, Mayor Jean Stothert says she's “cautiously optimistic” that the city's budget position will continue to improve in the next years of her administration.
Preliminary financial reports for 2013 indicate that the City of Omaha ended the year with a surplus of just over $10 million.
Part of that is the result of a mixed bag of revenues. Sales and restaurant tax totals fell short of the city's budget projections. But they were offset by a surplus in money from hotel tax and building licenses and permits.
Meanwhile, Stothert had directed department heads to hold off on purchases and hiring, and all but one department — the Fire Department — ended the year under budget.
But Stothert said the turnaround from deficit to surplus doesn't mean that she's ready to slash taxes or allow city departments to expand their spending.
“There will be some that will say: '$10 million surplus? Lower my taxes.' ... But we still have to be careful,” she said. “It's not like we have this big windfall and we're saying: 'We have money to spend.' ”
The most notable savings came from the Police Department, which cut $5.4 million from a $121.8 million budget.
Stothert said much of the savings came from efforts to reduce overtime.
Other departments also curbed spending: Public Works came in about $1 million under budget, a savings of about 6 percent. The Mayor's Office, City Council, Human Resources, Planning, Parks and a few other departments saved a collective $1.2 million.
Stothert, who took office in June, said she made a priority of pushing departments to make changes, because at midyear the city was poised to run a $13 million deficit. But because much of the savings came from delayed purchases that will eventually have to be made and positions that might eventually need to be filled, Stothert said, she plans to keep driving departments to become more efficient.
Next month, she plans to oversee a strategic planning session with all the city's department heads. At the Saturday meeting, they will have to be ready to develop quarterly benchmarks and lay out specific goals.
“I want to be able to go to the Planning Department, the Public Works Department, and not just say: 'How are you doing?' ” Stothert said. “But to say: 'Show me how efficiently your department is running. Show me what they're doing. Show me what your employees are doing.' ”
The city's financial situation, however, also is closely tied to ups and downs in the taxes that provide crucial revenues.
City Finance Director Stephen Curtiss said a $1.1 million shortfall in sales tax revenue and another $1.1 million shortfall in restaurant tax revenue don't seem to indicate any broader trends. He said sales tax revenues were up in the fourth quarter of 2013, and early indications show a continued upward trend in 2014.
Hotel taxes were $1 million above projections, or 26 percent over budget. Revenues from building licenses and permits were $2.8 million higher than expected, which was 47 percent over budget.
The mayor's focus for any additional revenues is public safety, she said.
“We have to prioritize what we have to spend our money on,” she said. “Right now we have to very carefully budget to get more police officers on the street.”