City budget up in anticipation of cap by Legislature

McCOOK Neb. — The discussion at the Sept. 03, 2024, McCook City Council centered around the fiscal year 2024-2025 budget. Key highlights included:

• A property tax rate proposal of 44 cents per $100 of valuation.

• Addressing wage disparities with a planned 3% increase to comply with the Industrial Relations Act.

• A general fund revenue goal of $14,387,614.

• Approving the first of three readings to increase the cost of utility services.

City Manager Nate Schneider shed light on the significant budget challenges faced by McCook, mainly due to recent legislative changes in Lincoln. The passage of Legislative Bill 34, which caps city and county spending, has further complicated the city's financial planning.

Schneider expressed concern regarding the implications of LB 34, which adjusts spending limits to the greater of 0% or the Consumer Price Index (CPI). "If the cap hits zero, how will we be able to operate effectively?" Schneider questioned, emphasizing the unpredictability of expenses that cities must manage. He highlighted that essential services, including public works and public safety, would face severe strains under such restrictions.

In response to the growing need for employee wage adjustments, the city is committed to conducting a wage study to align pay with years of service. Schneider acknowledged past practices, stating, "We've always just gotten people at the very bottom up to the minimum, but we never actually got them onto the scale where they needed to be." To mitigate costs, the city plans to implement these adjustments gradually instead of all at once this year, a strategy Schneider characterized as "biting the bullet."

However, the limitations imposed by LB 34 could hinder these efforts. Schneider reiterated the importance of maintaining equipment and services, stressing that cities cannot forego necessary spending due to arbitrary caps.

To address these fiscal challenges proactively, Schneider proposed increasing the property tax levy from 34 cents to 44 cents per $100 valuation. This adjustment aims to cover the wage study, requiring a six- to seven-cent hike. The additional three cents would facilitate necessary equipment purchases. "We don't know what the impact of LB 34 is going to be, but if we don't act now, our options will be severely restricted," Schneider cautioned.

Council member Jerry Calvin supported Schneider's concerns, pointing out the disparity between state mandates and local spending capabilities. "Did the state of Nebraska put a zero cap for their spending?' he asked.  "The answer is no; they just mandated it for cities and counties," he said, highlighting the perceived inconsistency in state policy.

Schneider reassured residents of the city's commitment to fiscal responsibility, stating, "We've always been good stewards of taxpayer dollars...but we've got to be able to operate in the here and now." Despite the hurdles, he emphasized the city's dedication to providing essential services while remaining conscientious of taxpayer contributions.

Regular Agenda Items:

• Adoption of the budget for FY 2024/2025.

• Adoption of the Fiscal Year Employee Classification Pay Plan for 2024/2025.

• Approve a 1% increase in the limit for unused restricted funds.

• First reading of an ordinance to increase water department rates by 8.5% to cover inflation and future capital improvements. The ready-to-serve fee will rise from $22.95 to $24.90 per month. The first 5,000 cubic feet will increase from $2.340 to $2.539 per 100 cubic feet, and usage above that will rise from $1.734 to $1.881.

• First reading of an ordinance to increase sewer department rates by 7.5% for inflation and significant projects. The base fee for residential customers will go from $19.98 to $21.48 per month, while commercial fees will increase from $29.11 to $31.29.

The first reading of an ordinance to amend solid waste collection fees: residential trash collection will rise from $26.25 to $27.25, and household/commercial waste will increase from $83.00 to $86.00 per ton. The $6 monthly fee for yard waste collection will remain unchanged.

Consent Agenda Items:

• Approved a $6,000 request from the McCook Chamber of Commerce for promotional use of ACE funds.

• Increase support for the McCook Humane Society by 5%, raising total funding to $4,068.32, plus an additional $9,000 for utilities.

• Allow city streets to be used for a 5K organized by Anytime Fitness on Sept. 21, 2024.

• Approved social media guidelines for city employees.

• Reappoint Brett Schmidt, Jon Stewart, and Paul Goodenberger to the Building and Housing Code Advisory and Appeals Board, with terms expiring in September 2028.

• Declare specific city equipment as surplus and authorize its disposal.

• Close the intersection of Norris Avenue and "C" Street around 1:00 p.m. on Sept. 18, 2024, for homecoming activities at McCook Public Schools.

• Authorized a Conflict of Interest Waiver for the city attorney to represent a surviving victim in a wrongful death case related to a city employee's death.

• Approved the employment agreement for City Manager Nathan A. Schneider for the 2024/2025 fiscal year.

The City Council went into an executive session to discuss potential litigation regarding property located at 1111 East "H" Street, involving Cindy and Ron Sabin.