Lincoln mayor proposing $25M bond for city budget, creating more funds for libraries, parks, sidewalks
LINCOLN, Neb. (KOLN) - The newest proposal for the Lincoln City Budget is a $25 million Highway Allocation Bond. The Mayor hopes this money can be used to fund street repairs.
The money comes from the state’s gas tax, which they pay to Lincoln every year. The city will use that revenue that lenders will bond against. Then the city repays with the gas tax money they get from the state.
The $25 million bond will be in addition to the quarter-cent sales tax from last October. The tax was expected to raise $13 million annually for the next six years.
“All transportation specific funding is spent on streets and transportation projects. The fourth-cent sales tax is unaffected by this proposal,” said Brandon Kauffman, Lincoln’s Finance Director.
“Highway allocation bonding allows the city to borrow funds upfront to get more street projects done in a shorter amount of time,” said Mayor Leirion Gaylor Baird. “The bonds are then paid off with the highway allocation funding that the state continues to send the city each year.”
City officials said borrowing now will pay off in the long run.
“Interest rates are very low right now. We could likely borrow at 1.5 percent,” said Jane Raybould, a City Council Member. “That’s an incredible rate and that is significantly lower than the rate of construction inflation, which is near 4 or 5 percent right now.”
By using these bonds, the city could free up about $1.25 million.
“We actually put ourselves in a position to free up general revenue funding to restore library hours, sidewalk funding and park improvements,” said Mayor Gaylor Baird.
That means the Mayor’s new proposal no longer closes libraries one day a week and includes more funding for the park endowment and quality of life projects.
“It creates opportunities to boost jobs and economic recovery, and opportunities to restore funding for important community and quality of life services,” said Sandra Washington, City Council Member.
Other facets of the proposed budget include reducing department budgets by $8 million, freezing cost of living adjustments saving around $700,000 and paying off bond debt early to save over $500,000.
This budget does not include an increase in property taxes.
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