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NE: Omaha’s bond rating dips

By   /   September 21, 2012  /   24 Comments

By Joe Jordan | Nebraska Watchdog

OMAHA — It wasn’t Black Friday, but listening to the Suttle administration, it’s close.

Mayor Jim Suttle

According to the mayor’s office, one of the country’s prominent bond rating services has downgraded the city’s financial operation while a second firm kept things as is.

Mayor Jim Suttle calls the downgrade “a devastating blow for the taxpayers.”

Moody’s has lowered the city’s general obligation bond rating from Aaa to Aa1 due to Omaha’s “persistent under-funding of its pension obligations.”

Cavanaugh Macdonald — an actuary hired by the city — says while changes made in the police pension program are working, they are offset by the lack of changes in the fire pension.

Suttle and the city council have gone round and round on the pension fight.

Last year, the mayor and fire union agreed on a new contract, but the council rejected it and took over negotiations.

Those talks have gone nowhere, and at a news conference last month asking “where’s the deal,” Suttle warned that without a contract the city’s bond rating would be in jeopardy.

Jean Stothert

During that news conference, Suttle repeatedly blamed City Council member Jean Stothert — who is running for mayor against Suttle — for “leading the charge” and the council’s inability to reach an agreement with the union.

At that time Stothert told Nebraska Watchdog, “It’s really false and the mayor should know that.”

As for Friday’s ratings dip Stothert said, “The main reason the City Council rejected the fire contract is we felt that it did not have significant pension reform … increased contributions and reductions of benefits is vital.”

Finance Director Pam Spaccarotella, who earlier this month announced her resignation effective Nov. 1, said Moody’s decision “will negatively impact the city for years to come.”

Contact Joe Jordan at joe@nebraskawatchdog.org

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Joe Jordan

  • Kevin

    I thought the expertise of Pam Spaccarotella was in place to alleviate things like this from happening? I guess she is not as bright as many think she is. Like I have said long ago. If she were as bright and able as Suttle thinks she is, she would have found a way to shore up the pension problem.

  • Balanced A. pproach

    The republican members of the council, lead by Stothart, thought they could “do it better”. Instead their meddling in an area that they have very limited skills in, is now going to cost Omaha millions, billions of dollars over the next decade or two.
    Good job, folks!

  • D. Mark

    These pension problems with the Fire and Police have been a problem for years and they can be fixed when you vote!

  • Hunyock

    Sorry Kevin but you couldn’t be more wrong. After Jean Stothert and the City Council mucked up the contract that Mayor Suttle had gotten the Fire Union to agree to, Moody’s downgraded the city bond rating last year as well. So Spaccarotella and the Mayor personally went to Chicago and got Moody’s to give Omaha it’s AAA bond rating back. But it depended getting a contract signed. The City Council has not delivered that after over a year and that is why we got downgraded.
    Now Jean Stothert has chased Pam Spaccarotella off by taking away a well deserved raise. How do you expect her to clean up Jean Stotherts mess again if she no longer works for the city.

  • Jazzee

    WHAT?????? Pension funding??? That was the lie to get the restaurant TAX to PUT money in the stupid pensions!!!!!!!!! We deserve an explanation here suttle….pension funding seriously????? What a dang joke this town is

  • Jazzee

    Hang on..republicans? It was fahey and suttle who gave away the farm …suttle enhanced the union pensions too oopsie he lied…he said the restaurant TAX was for the pension funding remember??? that was the whole dang purpose they were taxed where have you been? this was not the council’s problem it is suttle’s
    ps read the minutes from the police/fire pension they ADMITTED FOR THE year 2011 they never saw the 8% growth increase suttle and the unions promised us it was way below…so tired of bailing everyone out who has KNOWN about these pension problems for years and did nothing both sides…

  • Jazzee

    NO it depended upon shoring up the pensions and that was done with another TAX you are not correct. suttle never agreed to anything with the fire union they ‘pretended’ to agree to wage freezes and the fire guys went to court and won back pay because stupid suttle never got it in writing. this whole thing is a joke

  • Ricky

    Whichever genius City Council member came up with the idea to reject the deal Omaha had with the fire fighters and take over negotiations ought to resign asap. But maybe all of them should resign because all 7 voted to put on their power play. How long has it been since Mr McQueen started negotiations? Over a year? What a waste of time and money.
    Thanks a lot Omaha City Council!
    ricky from omaha

  • tbug

    When the masses of ignorance awaken to the definition of the words plastered throughout this ARTICLE.. they will see a new dimension of thought.. but not until they learn legal history, religious history and the meanings of legal words and symbolisms.. let alone IGNORANCE OF THE LAW IS NO EXCUSE.. as quoted in court cases from around the globe… If peeps took some time and turned off the beer and football and spent that time enlightening themselves with some truths of another language.. they could quickly RE-DEFINE many words like “OFFSET”, CHARGE, BOND RATING, CONSERVATIVE, etc… else they remain in the CORPORATE system of in- doctor-nated , educated slave ignorance! When will the mind of mankind cleanse themselves from the onslaught of mental pollution and hold these CORPORATE FICTIONAL AGENTS accountable for Breach of TRUST???? When will the Political volunteers of campaigns learn what they are doing under Trust Law? I will close by turn off and CLOSE ALL accounts YOU EVER put your SIGNATURE on and see what happens to the BOND (MONETARY) system.. for if YOU give NOT your CONSENT by signature.. the system of (CAESAR’s) fiction will fail and their BONDs/Grants and SUPPORT go down the toilet along with the MaYor’s Toilet paper tax.. whose a$$ are you willing to wipe.. your own or the chit that comes down from CORPORATE CAPITAL HILL?

  • Watching_From_Lincoln

    So glad we don’t have these problems in Lincoln/Lancaster County with our employees. Raises all around to the Police, Fire, city and County bargaining units, balanced budget, services intact for residents, new arena going up, addition to Memorial stadium going up, taxes holding steady – and all done with a Democrat Mayor and a 5-2 Democrat majority on the City Council and a 6-1 Republican Majority on the County Board.

    Moral? It’s NOT the Party of the persons holding office, it’s the competency, folks! So glad to be Watching From Lincoln!

  • Kevin

    The contract to which you refer to was not sustainable. Nor was it fair to the taxpayer. It was all one-sided.

    Hence, why the council axed it.

  • Kevin

    And a bloated union contract would cost the taxpayers millions… billions as well. Check for yourself… Look at how the pension is underfunded. The reason for the bond rating reduction.

  • concerned taxpayer

    Mayor Suttle and his negotiating team hammered out a contract with the fire union that included 0% wage freezes for nearly the first 1/2 of the contract, pension benefit concessions, end to “spiking”, firefighter pension contributiion increases and paying more premiums for health care by Firefighters. This would have saved the city of Omaha over 20 million dollars in wage and pension costs to date. The Omaha City Council (lead by Jean Stothert) has added more financial burden to the tax payers by voting NO on this multi-million dollar concessions package with Fire Union in Aug-2011 . Now their short-sight has cost the city of Omaha it’s bond rating…And Ms Stothert KNOWS this.

  • racefish

    The union should never have their hands on any retirement funds. Nor should those funds be in the hands of the city. They should all be in the hands of a third party, such as a fund manager. That would protect both, the city and the firefighters.

  • Hunyock

    Explain how it was one sided. Stothert never did. Suttle got the Fire Union to agree to No more spiking!!! That is what shoring up the pension shortfall is. It would have ended with the signing of the Mayors contract. Stothert NEVER told us how it is unsustainable and neither have you. Instead, because the contract was not signed, another year of firefighers have retired with spiked pensions thus it has increased the city’s pension shortfall.
    How is having the firefighters agree to no raises one-sided against the City? Now they have those raises and the city will pay $50 million more because of it.

  • Hunyock

    No,the Pension shortfall is not shored up because firefighters can still retire with spiked pensions because there is no contract. The old contract is still in place. Thus the shortfall keeps growing thanks to Jean Stothert and those that voted down the contract.

  • Charlie

    Nice work Mean Jean. Back to the WWF for you.

  • Jazzee

    the police can still spike too just not as much..read the contract see for yourself

  • Jazzee

    in return for no ‘as you say’ spiking what did they get? the DROP program another pension sort of enhancement check it out for yourself read up on DROP programs another rape of the taxpayers

  • Jazzee

    no they need to be fixed by law and get rid of CIR court and a real mayor who has some guts and isn’t buddies with them all

  • resistwemuch

    To all you experts on fire department “spiking” please be aware the only way it can be stopped is through elimination of the minimum manning language in the OFD contract. Minimum staffing requires the call back of off duty personell (at overtime) to cover slots left open due to “illness” vacations, personal leave days, union business leave, military leave and seminar travel and attendance. Check out what has happened in Las Vegas with their fire personell abusing sick leave to trigger call back at overtime of off duty fire people.

  • Doug

    Show us some math. What cost more in the long haul. The spiked pension from the OT, etc, or all the added payroll from having more FF’s on staff to up the minimal staffing.

  • country

    The bond market is not downgrading Omaha because of last two years of political nonsense; bond markets expect public officials to be gutless. What they are reacting to is 40 years of excessive public employee wages and benefits which are now a ‘UNSUSTAINABLE’ BURDEN ON THE OMAHA TAXPAYERS’.Add the sewer liability also.
    Just google ‘city bankruptcy’ and you will see what Omaha is facing… a situation like hundreds of communities accross the country….they do not have tax revenues to pay for three things at once: 1)Current services payroll; 2) bond payments from old capital projects; and 3) Retirement benefits for services rendered long ago.
    The solution is not clear. Some courts have cut the bond payments, some the retirement benefits. The bond payments have the collateral and the legal pledge of future tax receipts; the retirement benefits are unsecured.
    Some cases people just start moving away because its a long term noose around the communities survivability.
    Good luck Omaha, but your handling of the matter is the Joke of Nebraska. You always want more state money to solve your local problems. Then , instead of firing Mackiel as Superintendent for 20 years of failure( look at your scores) you pay him a $1,000,000 golden parachute?
    I feel for the good citizens of Omaha but they have elected fools to represent them…I have never seen such abuse by ‘public servants’ in the police department, the schools, the county, the firefighters.

  • Hunyock

    This is why I am so down on my state’s Republican party. It is controlled by a bunch of jerks from the 1st and 3rd district that have this distain for Omaha even though our city fuels half if not more of the state’s economy. Heinemann thinks the same way. Guess what Gov, half of your state live in the Omaha area as do half of it’s Republicans. The citizens of Omaha are terribly under represented in the state legislature, you have to go back to the 1890′s to find a Republican Governor from Omaha, and outside of the 1970′s you have to go back to 1929 to find a Republican Senator from Omaha.
    By the way Country, Omaha is far from being Bankrupt though I have known many of you who wish it were otherwise. Omaha is booming and it just makes you angry so you attack our Mayor who is probably more fiscally conservative than most you.