Nebraska City using cash reserves to pay wages

NEBRASKA CITY - Nebraska City Commissioner of Public Safety Bryan Bequette announced a shortfall of $480,000 in the city’s reserves at Monday’s meeting and asked other city commissioners to accept cash reserves lower than city targets at the beginning of the budget cycle.

Bequette: “This is Nebraska and we are Nebraska City and we have to balance our books, so a means to do that would be that the council would have to accept that they understand that we are not going to start the year off at 35 percent reserve. We would actually have to go down to 28.6 percent, instead of a 35 percent reserve on a budget of well over $7.5 million. This $2,659,000 and change -- if we accept to balance that knowing we’re going to 28.6 percent in reserve -- would be $2,173,000 and change.”

City Administrator Perry Mader said Nebraska City’s spending grew by $637,000 year over year, but the city used cash reserves to pay for the salary increases for the police department and other wages so that the property tax levy would stay steady.

Of the $630,000 in new spending, $610,000 was for salary and expenses without adding any new positions.

Mader: “A lot of that was in public safety.”

Nebraska City’s starting wage for a police officer went from $21 an hour to $27. There was also a 4 percent wage increase for other city employees.

Mader said the higher level of wages is not expected to go down, so the expense will still be there for subsequent budgets.

On Thursday, Mader said the city can afford the higher wages, but the purchase of a pumper truck and matching funds for the ambulance remount put pressure on the budget.

Mader: "The money is in good hands, the money is safe. We're doing our due dilligence, but as things get tight, you know with inflation and having to pay more to stay competitive with our wages, we're going to have to keep our eye on everything else and prioritize."

Finance Commissioner Cole Sharp said Nebraska City expects another step up in the minimum wage and is in the second year of its three-year wage study, so he expects additional increases ahead.

Sharp: “The hope is we continue to see growth in our tax base. Hopefully, for that reason, we will see growth in our reserve numbers also.”

He said the goal is to keep the levy steady, so, while the city typically targets cash reserves at 35 percent they might continue to use reserves to pay the higher wages.

Sharp: “Obviously I can’t speak for certain what the future will bring. We want to keep our levy even.”

Mader said the city has used a ranking and scoring system for capital improvements in the past and will most likely get back to that with department heads going forward.

Sharp said the city is committed to using reserve funds for a new fire truck and a remount of an ambulance. Those expenses have been taken out of this year’s cash reserves, although the city will not actually disburse the money this year.