Expense of alley lighting under review

McCOOK, Nebraska -- Lighting provided by the city throughout the majority of McCook's residential alleys may become a victim of future budget cuts. City Manager Jeff Hancock said street lights paid for by the city were commonplace in other cities he had managed, but alley lights "were quite a benefit."

Hancock told members of the McCook City Council during their budget meeting last week, that the expense to the city of lighting the alleyways would be reviewed in the future.

Hancock has consistently offered potential cost saving opportunities to councilors during budget conversations. The expense of maintaining Memorial Auditorium has been mentioned several times by Hancock in the past, as an item to review and determine if the expense was worth the value, as has the upkeep and expense of maintaining a city pool.

During the June budget workshop, one councilman inquired as to whether a staffing freeze would be necessary in the upcoming budget. The proposed budget does not indicate any such measure was necessary, however, Hancock said that a staffing study was underway but would take some time. The study will compare McCook primarily to other first class cities in Nebraska, which is not always an apples to apples comparison, according to Hancock.

Employee payroll expense represents the largest departmental expense in the city budget, and is one that consistently increases.

Hancock has proposed an across the board 2 percent "cost of living adjustment" wage increase in the upcoming 2013-14 budget. The cost of living increase is in addition to a merit increase which equals slightly more than another 2 percent increase, as well as employee longevity wage increases.

Hancock also commented last week that the city employee retirement plan does not represent a financial risk to future budgets.

Hancock said his office had received a call recently and some general inquiries on the street that were concerned about whether city employee pension plans were putting undue pressure on the city's budget, as has been reported in other U.S. cities in recent years.

Hancock explained to councilors that there was a difference between defined contribution pension plans and defined benefit pension plans. Hancock said other city's facing financial hardship, due to their pension plan, were typically utilizing defined benefit plans that required them to pay out a specific amount regardless of the status of the market.

McCook and other Nebraska cities utilize the defined contribution plan, according to Hancock, which pays out pension benefits based on what the market does and those benefits fluctuate on the basis of investment earnings.

"Nebraska communities are generally protected since the defined contribution plan is based on the financial markets and does not require defined payouts," said Hancock.