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    MetroNewsNow

    Mayor Stothert will Increase City Savings Accounts to Plan for Future Emergencies

     

    After a year of financial uncertainty and revenue loss, the City of Omaha projects a 2020 budget surplus estimated between $5-7 million dollars.

    The surplus can be attributed to numerous factors, including actions taken by Mayor Jean Stothert to reduce city spending by as much as $20 million as the Covid-19 pandemic severely impacted city revenues.  The total all-fund budget shortfall was initially projected to be up to $75 million.

    Mayor Stothert made early decisions to protect public health by closing libraries and community centers, cancelling summer camps, delaying opening five city pools and closing the others for the summer, and postponing police and fire recruit classes, achieving significant savings.  Summer part-time employees were not hired, and a hiring and spending freeze was implemented.

    However, end-of-year financial reports also show the city earned approximately $20 million in investment income, compared to the $2 million anticipated and budgeted.

    Mayor Stothert plans to increase the city’s cash reserves with a portion of the investment income. The cash reserve and contingency reserve funds currently total $17million; the funds could be increased by up to $10 million with the additional investment income.

    “Fortunately, we did not have to lay off city employees, eliminate city services or dip into our cash reserve in 2020,” said Mayor Stothert.  “Increasing the reserve funds now positions the city for future unexpected emergencies and events, and 2020 has certainly demonstrated the importance of strong financial planning.”

    Funds invested with Reams Asset Management in 2020 paid more than 9%, resulting in the additional income.

    Finance Director Steve Curtiss recommended the investment strategy and commissioned DeMarche, an investment management company, to recommend a treasury management firm to maximize returns within the City’s investment policies. (DeMarche currently provides consulting services for the city’s pension funds.)

    “I am very pleased with the outcome of our treasury search process and the selection of Reams. I was confident we could improve our return on investment. The 2020 performance shows this decision benefits taxpayers by increasing investment income,” said Finance Director Steve Curtiss.

    The 2020 estimated carry-over includes the $60 million in CARES Act funds received from the State of Nebraska and Douglas County.   The City Charter requires the carry-over be used in the 2022 budget.

     



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