Grand Island City Council Study Session – March 18, 2025: Finance Revenue Review and Community Recognitions

The Grand Island City Council held a study session on March 18, 2025, at 6:00 PM in Council Chambers, 100 E First Street. The meeting began with presentations recognizing heroic acts and lifesaving efforts by community members, followed by a comprehensive finance revenue review covering major revenue sources, budget projections, and upcoming fiscal decisions. Council members present included Council President Sheridan, Councilmembers Stelk, Nickerson, Brown, Midnoza, O’Neill, and Pollock; Councilmembers Conley, Hazi, and Lanfier were absent. City staff included City Clerk Jill Grenier, City Administrator Laura McAlloon, Finance Director Matt Gleason (lead by Patrick Brown, Assistant City Administrator/CFO), Public Works Director Keith Kurtz, and others.

Recognitions & Proclamations

• Good Samaritan Recognitions: Price King (4th grader) and Amelia Schreiner (2nd grader) were honored for reporting a house fire, enabling firefighters to rescue pets and prevent injury. Leto Canonis was recognized for assisting a police officer during a struggle with a combative suspect. Fire Chief Corey Schmidt thanked the children for their quick 911 calls, noting that early notification is critical.
• Lifesaver Recognitions: Councilmember Doug Brown and Wes Harris received certificates for performing CPR on a man who suffered a medical episode at Central Nebraska Regional Airport, saving his life. Family members and airport staff attended to support the recipients.

Public Comments & Testimony

• Jamie Parr (speaking on behalf of the state fair) stated that the host city’s lottery match funds are mandated by constitution and have been provided since the fair moved to Grand Island in 2010. He offered to answer questions about the fair’s investment in Fonner Park.
• Jay Vavrochek (resident) thanked the council for action on the Fonner Park ground lease. He noted that the state fair lottery match is a valuable investment, and referred to a recent phone call with City Administrator Laura McAlloon clarifying a lodging tax matter, obviating a need for a study session. He encouraged the council to consider expanding uses for lodging tax revenue, citing that Hall County’s lodging industry is worth $35 million and suggesting that with new developments (Good Life District, casino) revenue could potentially reach $1 million annually if the tax rate were modernized.

Discussion Items: Finance Revenue Review

Presentation by Patrick Brown (CFO) and Brian Schultz (Finance):

• Sales Tax: Year-to-date (through January 2025 sales) up 1.5% from prior year, but March data showed a 15.5% spike. Prior months had anomalies (a high October and a 16.8% drop in December) making Brown cautious. The budget assumes 1.5–2% growth.
• Property Tax: The city has levied $12 million annually for six years. A transparency dashboard showed the mill levy declining over time. The municipal equalization fund (projected $1.6 million this year) is at risk of elimination via a bill introduced by Senator Klaus; if eliminated, the city would lose $1.6 million annually. Council discussed potential phase-out options.
• Casino Tax: 20% of gross gaming revenue is allocated: 70% to state property tax credit, 2.5% to state general fund, 2.5% to compulsive gamblers assistance; Grand Island receives 12.5% of the 20%. Budgeted $1.2 million for FY25 with casino resort opening; current receipts $281,909, on par with prior year.
• 2018 Half-Cent Sales Tax (sunset March 2029): Used primarily for roads (80%) and public safety equipment (20%). Finance plans to compile a list of projects funded. Councilmember Brown noted the tax has greatly accelerated road projects (e.g., Podash, South Locust). Public Works Director Keith Kurtz stated that large projects like the Broadwell overpass will likely extend beyond the sunset, emphasizing the need for renewal planning.
• Food & Beverage Tax: Voter-approved in 2016. Allocations include: state fair lottery match (10% of lottery sales, ~$500-550k/year), Grow Grand Island ($500k/year, agreement expiring September 2025), Husker Harvest Days ($200k/year, final payment Nov 2027), debt service on Vets Ballfield (remaining $1.6M, paid off Oct 2027), and parks projects. Brian Schultz noted that roughly $3 million in annual commitments will be freed up by late 2027, requiring council strategic decisions on future use. Councilmember Brown questioned whether economic development funds (LB 840) and Grow Grand Island could be rationalized together.
• Hotel/Lodging Tax (2%): Currently generates ~$500-550k/year, static since pre-COVID. The tax expires December 31, 2025 unless reauthorized. Funds currently support Heartland Events Center operations. Council expressed support for renewal, with possible broader language to include tourism promotion. City Administrator Laura McAlloon said a decision is needed before the FY26 budget is adopted. The new venue operator (VenueWorks) projects eventual profitability, but capital needs (deferred maintenance) are high; Honeywell will present an energy audit on April 22.
• Keno Proceeds: Annual $350-400k, used almost exclusively for parks and recreation (99.9%), with a small amount for utility bills on city entrance signage.
• General Fund Reserves: Projected ending cash for FY25 is $45 million, with a reserve policy of 20-30% (target 25%). Excess reserves stand at $32 million. Councilmember Nickerson expressed surprise at the high reserve level and questioned whether the city should reduce property tax levy given such reserves. Brown advocated a conservative approach due to economic uncertainties (tariffs, federal cuts). Councilmember O’Neill recalled the difficult budget situation in 2017 and urged prudence.
• Good Life District Sales Tax: Collected $2.4 million in first five months (Oct–Feb, with 30-day lag). Finance is actively collecting and educating businesses.
• Online Payment System: Councilmember Brown and other members pushed for digital submission of occupation taxes to reduce delays and lost mail. Finance plans to include this in a future phase of new permitting software (Citizen Serve).

Key Outcomes

• No formal votes were taken; the session was informational and directive.
• Council directed staff to bring a budget message and expenditure review to the April 15 or 22 study session, incorporating council guidance on priorities and the conservative fiscal approach.
• The administration will prepare a recommendation on the hotel tax renewal for council consideration this summer, ahead of the September sunset.
• Future strategic planning sessions (date not set) will address allocation of freed-up food and beverage tax funds and major capital projects (e.g., west side parks, fire station #3).
• Finance staff will continue developing an online payment portal for occupation taxes as part of the broader digital transformation.
• Council acknowledged the need to plan for the 2018 sales tax sunset in 2029, with Public Works already incorporating potential funding gaps into the six-year plan.