Omaha Mayor Jean Stothert is proposing a tax cut in the upcoming city budget, marking the third time she has pushed to reduce the city’s property tax levy during her tenure leading City Hall.
Stothert’s recommended 2% tax reduction for the City of Omaha levy is the result of a few things, she and her budget planning team said this week: a higher-than-normal rise in property valuations by the Douglas County assessor, solid investment returns, and an expected $112 million payout from the most recent federal coronavirus relief package, half of which the city already has in the bank.
Stothert, who won a third term as mayor in May, proposed the tax cut during her 2022 budget proposal to the public and the Omaha City Council on Tuesday.
A public hearing on the budget is scheduled for 6:30 p.m. Aug. 3 in the Legislative Chambers of the City-County Building at 1819 Farnam St.
Other notable items from Stothert’s proposed budget and capital improvement program include early plans for a new police and fire headquarters, more Public Works employees to oversee additional street repairs and money to kick-start Omaha’s tourism industry as the area continues to emerge from the ongoing pandemic.
The budget proposal, Stothert said, “really focuses on recovery, reinvestment, and rebuilding from the COVID-19 pandemic.”
The tax cut would reduce the city’s tax rate by a penny, from 47.922 cents per $100 of valuation to 46.922. That means that someone who owns a home valued at $150,000 would pay about $704 each year in city property taxes, a savings of about $15 in city taxes if that homeowner’s valuation stayed the same.
About 45% of the city had their property valuations rise, according to the City of Omaha.
The city’s tax rate is just one piece of an Omahan’s property tax bill; the county, school districts and other governmental entities make up the rest.
Every penny that is cut from the City of Omaha tax rate equals about $4 million less spending in Omaha’s budget.
Stothert has successfully proposed a 2% cut in the city’s property tax rate twice since she was first elected in 2013: once in the 2015 budget, and again in the 2017 budget. The last time Omaha’s levy was lower than the proposed 46.922 rate was in 2001, according to the city.
“Careful budget management is one thing that I worked very, very hard on,” Stothert said.
The city ended 2020 with about an $8 million surplus.
The 2022 general fund is proposed at $456.1 million, representing about a 3.5% increase from the 2021 budget. The general fund is the pot of money that pays for most city services and the employees who deliver them.
The entire budget proposal comes in at about $1.2 billion.
Here are some highlights from the budget proposal:
Police, fire, new public safety headquarters
A new public safety headquarters — that could bring the city’s police and fire operations under one roof — has been included in Stothert’s proposed 2022-27 capital improvement program.
The project would likely mean demolition of the current police headquarters, located off Howard Street between 14th and 15th Streets, and the main fire station near 16th and Jackson Streets.
But the plan is in its infancy, and the CIP does not list an estimated cost of the project, which is likely several years away from completion. Steve Curtiss, the city finance director, said it’s possible philanthropic partners could help with the cost.
“As far as the details go about where it would be, how much it would cost, what the design would be like — that’s something that we will be focusing on,” said Stothert, who called the project one of her priorities for her third term.
Discussion and study of such a building goes back more than a decade to when Stothert was on the City Council from 2009 to 2013.
Former Omaha Police Chief Tom Warren, who in July took over as Stothert’s chief of staff, said other cities have made public safety services more efficient by combining police and fire in one building.
The police headquarters, which opened in 1970, and the downtown fire station both are aging, energy-inefficient and have problems with asbestos, Stothert said.
Razing both buildings would open two locations that are “prime real estate” for new development, Stothert said.
The proposed police budget of $169.9 million would increase 3.25% from 2021. It includes money to hire a mental health coordinator, at $95,000 a year, to oversee the department’s mental health co-responder program and teach recruits first aid related to mental health.
The co-responder program in 2022 will begin to transition from being paid for through grants to being paid for from the city’s general fund.
The police budget also includes money for expansion of the department’s peer support group program, more crisis intervention training and inclusivity training.
Last year, the department established a 24/7 call center in Elkhorn to handle non-emergency police calls that can be dealt with over the phone, such as thefts or destruction of property. Staffers, including sworn, part-time and retired officers, handled more than 70,000 calls in 2020, according to the city.
“We feel like that’s a much more efficient way to handle those things,” Stothert said.
The number of budgeted officers will remain at 906.
The police budget also includes money for 20 new cruisers, a crime lab and van and K-9 vehicle.
The proposed Fire Department budget is $120.7 million, a 4% increase over 2021.
Sworn Omaha fire members will increase by six people in order to staff Medic 2, a paramedic unit that Stothert reestablished in April at the central station downtown at 15th and Jackson Streets.
Officials have said the unit will help lighten the load throughout eastern Omaha.
A new fire recruit class of 20 to 30 people will begin in November, and the capital improvement program includes money for a new fire station in northwest Omaha.
Omaha’s $24.2 million annual contract with a new residential curbside trash, recycling and yard waste hauler is costing the city about $2 million more each year than was anticipated, Stothert said.
That’s because of a doubling of the amount of recyclables people are putting at the curb each week, a surge of people who have enrolled in the city’s special collections program and the number of bigger families who requested an additional trash or recycling cart.
The department in total is set to receive $31.3 million, a 7% increase over 2021. Most the department’s money from the general fund goes toward the trash contract; Public Works receives money from several other sources.
The budget increase will address those increased costs in part by adding nearly 30 employees, bringing the number of budgeted Public Works employees to 697.
Four of the new employees will be brought on to inspect the additional work being done as a result of the $200 million streets bond issue that voters approved last year.
In approving the bond issue, voters also authorized the city to increase the property tax rate by $35 for every $100,000 of valuation. But the city has not yet had to do so, and it won’t again in 2022.
City employee salaries
A recent study of city employee salaries found that some city employees are underpaid, while others are overpaid.
The city is in negotiations with Local 251, the union that represents city employees, to address the issue. Any employee who has been underpaid will receive a raise, while employees considered overpaid will keep their current salary, Stothert said.
“We think that that will really help with our recruiting efforts,” Stothert said.
Details of the study have not been made public.
Stothert has proposed a 4.6% increase for the Parks, Recreation and Public Property Department, in part to shift responsibility of sidewalk snow removal completely to parks employees.
In winters past, clearing the sidewalks has been done by a mix of parks and Public Works employees.
The $23.8 million budget would add five employees.
Keystone Trail, ‘Baby Bob’
Along with the inclusion of a new public safety headquarters, the city’s proposed capital plan includes multiple pedestrian-focused projects.
One project, set to be completed in 2023, would add a section to the Keystone Trail from Democracy Park near 90th and Fort Streets north to Cunningham Lake.
A new pedestrian bridge in downtown Omaha, the North Downtown Riverfront Connector Bridge, would provide a link to the 3,000-foot Bob Kerrey Pedestrian Bridge, a move meant to increase access between North Downtown and the riverfront.
The “Baby Bob” would span Riverfront Drive and the Union Pacific Railroad tracks, connecting Omaha’s iconic pedestrian bridge to a point near the intersection of 10th and Mike Fahey Streets.
The current 20-minute walk from just north of the CHI Health Center to reach the Missouri River bridge would be cut in half, the city has said. Construction is set to begin in 2022.
The proposed capital program also includes funding for the last section of the Riverfront Trail North, a 1-mile section along Abbott Drive from Millers Landing to Kiwanis Park.
Visit Omaha, the city’s tourism arm, “got hit really, really hard” during the pandemic, Stothert said.
In 2022, the visitors bureau is set to receive $2 million from the city, an 11% increase. Part of that increase reflects an agreement the city made with Douglas County to provide more tourism dollars.
The city also plans to allot at least $3 million to the tourism bureau from its federal coronavirus relief money, and will likely funnel millions more, as part of “a broader big tourism plan,” Curtiss said.
“They are going to be focusing on recovery programs to increase visitor demand, regain lost jobs and get tourism revenue streams flowing again,” Stothert said.
The Omaha Public Library system’s budget is proposed to remain roughly flat, at $17.2 million, and its staffing would remain at 100 employees.
Eventually, Omaha’s main downtown library, W. Dale Clark, is expected to be torn down to make way for new development to complement the renovated Gene Leahy Mall, which is expected to open Memorial Day weekend 2022.
A new, smaller library would then be built elsewhere downtown. The current library sits at the western edge of the mall.
The city is in negotiations to bring development to the site, but without concrete plans in place, the city has moved the downtown library project to the 2023 capital improvement program. It has a listed cost of $20 million.
A planned southwest branch, which would be the city’s 13th public library, also was moved to the 2023 plan. It has a listed price of $15 million.
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