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City of Lincoln
Financial Mismanagement, Insufficient Accountability, and Lax Oversight Threaten the City’s Stability

Report Number: 2018-110

Figure 1
Overview of Lincoln City Government

Figure 1 is an organizational chart of Lincoln city government that identifies city officials and presents the reporting structure of its departments and functions. The chart shows that the city’s citizens elect members of the city council and the city treasurer. In addition to appointing the city manager, city attorney, and representatives to commissions, boards, and committees, the city council acts as the board for the Lincoln Public Finance Authority and the successor agency to the former city redevelopment agency. The city manager administers seven departments, including the city manager’s office, the support services department, the community development department, the public services department, the engineering department, the police department, and the fire department. The city manager’s office is responsible for general administration, human resources, public information, economic development, and records management. The support services department is responsible for finance and accounting, utility billing, information technology, purchasing, and risk management. The community development department is responsible for property development, building permits, and development project compliance. The public services department is responsible for environmental quality, public utilities, transportation services, public facilities maintenance, fleet services, and administrative support services. The engineering department is responsible for public facilities and infrastructure support, and capital improvement projects. The police department and the fire department are responsible for public safety.

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Figure 2
Lincoln’s Government Fund Revenue Rapidly Grew in Fiscal Year 2004–05, Followed by a Significant Decline

Figure 2 is a line graph showing Lincoln’s government fund revenue from fiscal years 2003-04 through 2016-17. During this period, revenue peaked to more than $112 million in fiscal year 2004-05, followed by a substantial decline that resulted in annual revenue ranging from $24 million to $38 million from fiscal year 2007-08 onwards.

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Figure 3
Lincoln Inappropriately Transferred Reserves Each Fiscal Year From Its Water Connections Fund to Offset Year-End Deficits in Other Funds

Figure 3 is a stacked bar graph displaying amounts transferred in fiscal years 2013–14 through 2016–17 from Lincoln’s water connections fund to other funds with year-end deficits. Each stacked bar shows the dollar amount of transfers to five different funds—fire, parks, regional sewer, drainage, and airport—as well as to other funds, which include a federal grant fund and a capital project fund. The total amount of transfers range from $7 million in fiscal year 2016-17 to $19 million in fiscal year 2015-16. The city posted these transfers to its accounting records to take effect on June 30, the last day of the fiscal year, but transferred the same amounts back to the lending fund the next day or shortly thereafter. The city repeated this process in subsequent fiscal years.

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