Omaha City Council OKs $333.4 million GOs for ballot

The Omaha City Council last week approved placing a $333.4 million general obligation bond referendum on the Nov. 5 general election ballot.

The GO bond proceeds will go to sewer construction and improvements, streets and parking, public safety and convention center facilities, parks and recreation, highways and bridges, and police and firefighting equipment, as part of the city’s capital planning process for the next four to five years, Omaha Finance Director Stephen Curtiss said.

The city’s authorizing the revenue redevelopment bonds would create a community development agency, which, Curtiss said, is part of the city’s redevelopment efforts, which include the so-called Urban Core project.

According to a strategic plan for Urban Core released in March 2022, Omaha’s downtown has lost roughly 21,000 jobs since 1963. The city is also losing its ability to grow through annexation: “The Missouri River [to] the east, low-density acreage developments along the county line [to] the north, large existing cities and the county line to the south and physical barriers on the west are quickly coming together to limit Omaha’s future expansion,” the plan states. 

The city’s planning department estimates that by 2040 Omaha will start running out of land to develop on its suburban outskirts, and by the mid-2050s, the city’s longstanding pattern of growth through annexation will slow to a crawl.

So Omaha must grow from within, the plan concludes, which depends on the revitalization and redevelopment of its urban center.

Omaha issued $94.5 million of various purpose bonds in October 2023, which were rated Aa2 by Moody’s Ratings and AA-plus from S&P Global Ratings. The proceeds were used to buy equipment and to improve streets and highways, public safety services, public facilities, sewers, parks and recreation facilities.

Early this year, the city issued $22.2 million of Series 2024A special tax revenue and refunding redevelopment bonds and $18.9 million of Series 2024B special tax revenue redevelopment bonds. The Omaha Public Facilities Corp. also issued $20 million of Series 2024A lease revenue bonds and $50 million of Series 2024B lease revenue bonds.

Moody’s assigned Aa2 ratings to those bonds. The outlook is stable. S&P assigned a rating of AA-plus with a stable outlook to the 2024 bonds.

“Omaha’s general credit characteristics reflect our view of the city’s function as a regional economic center supported by strong principal employers, a robust housing market, relative affordability and population growth, which together drive the expansion of the city’s major revenue streams, namely property and sales taxes,” S&P credit analyst Malcolm Simmons said in a statement. “Omaha’s relatively low cost of living and strong business climate continue to make the city an attractive target for firms looking to expand and relocate their operations.”

Omaha’s total leverage surpasses 350% of revenue, with the associated fixed costs at around 20% of revenue — both “a relative weakness at the Aa2 rating,” the rating agency said in its report.

Still, Moody’s said, “the city will continue to benefit from the presence of long-standing institutions like Offutt Air Force Base, the University of Nebraska Medical Center, Creighton University and several Fortune 500 companies. The city’s solid financial profile and growing revenue will continue to mitigate its higher leverage and fixed cost burdens.”