Council Reviews Budget Options

The Sidney City Council met in a Work Session Aug. 6 to discuss next year's budget.

The agenda was kept to reviewing the City Manager's Budget for 2019-2020.

City Manager Ed Sadler's budget recommendation included a summary of how the City of Sidney arrived at this point. His summary says budget requests during the last two years have seen reductions of about $1 million each year. The reductions were a result of losses attributed to the sale of Cabela's to Bass Pro and the resulting loss of white collar jobs in Sidney. He added that the council's desire not to increase the mill levy resulted in a decrease in revenue. He added that Sidney is almost half of the maximum mill levy.

His report further says that last year was the harder hit of the two years with the decreased valuation of real estate property as well as the loss in sales tax revenue.

“For whatever reason, the State of Nebraska stepped in to reassess properties in Cheyenne County and further reduced the assessed values of most residential and some commercial properties. For budget purposes, we have shown a reduction in property tax revenue and shown a reduction in franchise fees,” Sadler said in his letter to the council.

Franchise fees are fees for service such as water usage.

Sadler said in the work session the assumption is the council will not want to raise the mill levy.

He said official property tax assessment numbers will not be available until Aug. 20 and the council is scheduled to approve the budget Aug. 27. Presently, Sadler expects to reduce budget requests — not including normal salary increases — by almost $400,000, and more than $140,000 from this year's budget.

He said the reduction of the Cabela's staff after the purchase by Bass Pro led to a loss of about 1,700 positions with an estimated 300 workers remaining.

“However, the numbers are not indicative of that,” Sadler said.

He said in his report homes for sale last year numbered about 120; 60 with utilities completely shut off. In his report, he said the number of homes for sale this year have fallen to as low as 70 units and as of Aug. 6 were 92 units. He noted that while Bass Pro closed the Distribution Center, laying off about 100 employees, new businesses are coming to Sidney. He noted that UST Global and MMP are “not having a difficult time finding talented workers.”

Sadler and the council discussed what options will be considered in reducing the City's budget: cutting services, part-time or full-time staff, or increasing fees for services. Vice-Mayor Joe Arterburn questioned at what point the cuts will affect the residents. Sadler is asking for 2 ½ percent salary increases for the lower steps, and 1 ½ percent for the employees in the upper half. His proposal said last year each employee received a 1 ½ percent cost of living increase by no step increase.

He said the baseline for the 2019-2020 budget year will be the 2018-2019 budget.

Council members asked about the cost of staff training. Sadler said each year training is not funded, it becomes a higher priority. Councilman Bob Olsen also asked if the cuts will impact public safety.

“The impact has truly been part-time people,” Sadler said.

Mayor Roger Gallaway and Arterburn asked if it is time to look at fulltime staffing with Arterburn going so far as to ask about mid-level positions. Sadler said there is no extra positions in the City. He said the proposed budget

“At some point, I think these cuts will be counterproductive,” Arterburn said.

Arterburn suggested the City is at the point of raising the mill levy to reinstate services.

Sadler proposed reducing the Electric Department budget by $50,000. He added that Bass Pro approached the City to provide a back-up system for its IT department. The system would be funded by the company.

Sadler proposed conducting a rate review on electrical charges. He is proposing a flat rate, similar to a “budget billing” program.

“I think even with losing the lawsuit, we are in the position to lower rates,” he said.

Sadler added the City negotiated with the Emergency Communications Center, reducing the City's increase to about $3,000. He added there is another county yet to be named inquiring about emergency dispatch services.

The proposed budget has the City's support of the Cheyenne County Chamber of Commerce reduced from $30,000 to the previous level of $20,000.

“Right now, it is a draft contract,” Sadler said.

He said the contract would reflect what services are expected for the amount of support offered by the City.

Arterburn disagreed with the proposed reduction.

“To me, it falls in the same area of taking too many steps back,” he said.

Arterburn asked about questioning department managers on the budget. Sadler said it is the manager's budget and he has already met with the departments.

Tuesday night, the council met in a formal meeting, including budget reports for all city departments.