Wednesday Nov 24 2010
Time to get Lincoln’s financial house in order
By: Stan Nader, Special to The News Messenger
When I campaigned for a seat on the Lincoln City Council, I refused to unconditionally support Measure K because I believed the city had not done all that it could to cut costs before asking the voters for more money. There remained so many questions and doubts in the minds of voters as to the city’s past and current spending, its unfunded pension liabilities and the existence or non-existence of a plan to make sure that the city didn’t find itself with a structural deficit in the future. Voters did not feel confident the city could be trusted with more of their money. I campaigned on the promise of “scrubbing the city’s budget.” I fully intend to do all that I can to keep my promise. While the highest priority is addressing the city’s current budget shortfall, we need to look toward the next steps at scrutinizing the city’s liabilities and past spending while planning to achieve fiscal sustainability in the future. Two proposals I will bring to the council are a citizens’ advisory auditing task force and a fiscal sustainability plan. The purpose of the auditing task force is to harness the expertise of the many knowledgeable citizens and business owners of Lincoln to get a clear picture of Lincoln’s unfunded pension liabilities, finances, spending and financial reporting practices. The goals of the auditing task force would be reducing expenditures and increasing efficiency, accountability, and transparency. Modeled on the citizens’ advisory financial task force created in March 2009, the auditing task force as I propose it would have the following duties: • Determining the current and future amount of the city’s unfunded pension liabilities and providing suggestions for reducing those liabilities. • Reviewing all the city’s current vendor and service contracts to see if they were the most cost-effective options available and making recommendations, if needed, to improve the city’s contracting processes to achieve greater savings. • Reviewing all of the city’s warrants for the last five years to find expenditures or patterns of expenditures that should be eliminated in the future. • Reviewing the city’s current labor MOUs (memos of understandings) and salaries to determine appropriate salaries and benefits given Lincoln’s size, cost of living, budget, revenue base and fiscal stability. • Providing a statement of all outstanding loans between city funds, their balances, their repayment schedules and interest rates. • Engaging the services of a forensic accountant of the task force’s choice to assist the task force. • Providing a template for monthly financial reports to be provided by city staff to the public online. • Reviewing city contracts currently in effect or competed within the last two years for over-billing, fraudulent billing or shoddy work and referring those matters to the city attorney for the purpose of recovering those costs. • Auditing all of the city’s funds, starting with Fund 600, back to 1999, in phases to be decided by the task force. These are some of the proposed duties for the task force. The fiscal sustainability plan, on the other hand, would be forward-looking. The goal of such a plan would be to put in place a set of long-term principles to keep Lincoln from finding itself with a structural deficit in the future. I’ve looked at the fiscal sustainability plans adopted by the cities of Stockton, San Luis Obispo, Newport Beach and Henderson, Nev. and the plan I propose includes the best ideas from those plans and would address labor relations, monitoring of revenues and spending, reserves, budgeting, increasing revenues and cost reduction. Some of the ideas in my proposed plan include: • Absent exigent circumstances, publicizing all labor agreements containing cost increases and making those agreements available to the public at least two weeks prior to their adoption. • Costing out all employee compensation packages, with total costs displayed to the public so that city residents can understand and evaluate employee pay. • Eliminating automatic cost of living adjustments in labor agreements. • Having monthly financial reports provided online. • Adopting a formal cash reserve policy and a policy of maintaining minimum fund balances in all city funds. • Eliminating vehicle allowances. • Increasing employee involvement in providing cost reduction options. • Reviewing city revenue performance no less than quarterly and making appropriate budget adjustments if revenue performance is not meeting projections. • Ensuring fee structures are such that they meet cost recovery targets. • Limiting the practice of cashing out vacation and other leave to what is legally required. The auditing task force and the fiscal sustainability plan are only two of my ideas and they are in the draft stages. I welcome all comments and suggestions, and I encourage anyone interested in helping me formulate these proposals to contact me and get on board! Copies of these draft proposals will be made available to The Lincoln News Messenger and will be posted on my website, stan4Lincoln2010.com, as well as on ClubLincoln.net. I can be reached at firstname.lastname@example.org or 833-2959. I need all of Lincoln’s accountants, auditors, retired executives, number crunchers and folks with plain ol’ horse sense like myself to assist in getting Lincoln’s financial house in order. I haven’t forgotten my promise to work to eliminate lifetime health care benefits for City Council members. I will also propose an amendment to the Municipal Code to eliminate these benefits starting Jan. 1, 2011 (it would present legal issues to eliminate vested benefits) and to require sitting council members to pay for their healthcare benefits. I fully intend to lead by example and I hope the other council members will do the same. I am confident that all of us who love Lincoln can save it if we just pull together. We are, in the words of Shirley Russell, “better together.” Stan Nader is a newly elected City Councilman. He takes office Dec. 14.