City’s auditor: EMS draining cash reserves

The city’s auditor pulled no punches last week in advising city leaders that the ambulance service has all but drained Aurora’s cash reserves over the past five years, to the point that EMS or other departments will have to be cut in next year’s budget.
While presenting his annual audit report during the March 25 city council meeting, Michael Hoback of AMGL, P.C., said “It’s gonna be ugly a year from now when you do your budget” based on the current level of city spending.
“Overall, your biggest black eye in all of this is going to be the general fund and it’s due to the fact that we’re draining the general fund to fund the EMS,” Hoback said during his 30-minute report. “I’m not going to say if we need to keep the EMS or not. I’m just saying that EMS has been a big drain on the city’s finances since we took it over. It’s a great service. I mean, you like to have it, but there’s definitely been a cost to it.”
Hoback began his presentation by sharing highlights of the 78-page audit with the council, pointing out the city’s strategy of using general fund cash reserves to help cover rising EMS expenses since the city took over the ambulance service in 2019.
“We did have pretty adequate reserves five years ago, but we’re to the point now where it’s nothing,” he said, citing a report which listed unassigned operating/replacement reserves in 2020 at $1.4 million. That number dipped to $1.12 million in 2021, $778,000 in 2022, $682,000 in 2023, and for 2024 was listed at zero. “I’m kind of concerned with how we’re actually going to cashflow the general fund and have any sort of cash reserve there because we added a million dollar deficit in the budget for next year, due entirely to the EMS.”
Hoback focused a majority of his report on EMS funding, suggesting that the only other department that rated higher per capita in a comparison of 32 other like-size cities in Nebraska (with a population of between 3,000 and 10,000) was the police department. Spending per capita for Aurora’s Police Department was listed at $312 in 2024, up from $270 in 2023, compared to the recommended average of $225 per capita. 
By comparison, Aurora’s fire/EMS department was listed at $388 per capita, up from $329 the year before, compared to the recommended average of $70 per capita for like-size cities. To be clear, Hoback also pointed out that most but not all cities of similar size in Nebraska rely on volunteer staff, while Aurora utilizes volunteer firefighters combined with paid EMS personnel.
“When you look at the cost on EMS, we spent $777,000 basically out of the city’s cash reserves to fund that this year,” he explained. “We do get $250,000 from the county, but the city transferred in $742,000. That’s a huge hit to our city budget. We’re basically to the point where the general fund, going forward, if you spent your budget that you had done for 2025, the general fund will be broke a year from now and you had a big property tax increase of like 22 percent this year.”
City leaders had proposed a 38 percent budget increase in September, but lowered that to 22 percent based on heated reaction during a “pink postcard” public hearing. Hoback noted that the city may have to consider a tax increase with next year’s budget, though that will be limited by state statues.
“The only long-term solution I see is a sales tax to fund EMS,” he said. “I know we voted on it a year ago and we didn’t pass it, and we can’t vote on it again for another two years, but I think that’s the only solution. It’s either that, or we just continue to raise property taxes, which is going to be harder to do now with new legislation, or we look at other programs that we can’t afford to fund just because EMS is taking up so much cash.
“To me, the obvious answer is a sales tax and I talked about that a year ago,” he continued. “I think that was the best solution and it didn’t happen, but something needs to happen for our general fund to have any sort of cash reserves going forward and to be able to fund the programs that we’ve had in the city for a long time.”

Cost-benefit analysis?
Esther Bergen, a newly elected member of the council, asked Hoback at that point if he thought a cost-benefit analysis could be done to help the council better understand EMS operations.
“Is there something you could recommend that we could see what’s profitable in it and what’s not profitable and be able to enhance the areas that are earning us money?” she asked. “Is there any potential in that realm?”
“We can look at the way we’re operating,” he responded. “We had $700,000 in revenue there this year and your operating expenses were $1.6 million. It’s mostly personnel costs. You’d have to cut staff there to make much of an operational change. I think either we get rid of it, we get rid of other general fund departments, or we look at a sales tax.”
Hoback reported that Aurora is the only city of the 32 in the comparison group that does not implement a local option sales tax. Based on last year’s taxable sales of $63 million, he said a sales tax would generate approximately $945,000 a year.
“That’s a lot of revenue that could come into the community,” he said. “There is a lot of traffic that goes up and down the interstate, people from nowhere close to the area would be paying revenue into the city, helping pay for that EMS. We could use that sales tax for other departments. I just don’t see a way to operate the city like we are without additional revenue, and the only additional revenue that you guys can really come up with is going to be a sales tax.”
Bergen then asked about steps that could be taken in preparing next year’s budget this fall, in light of the fact that a sales tax question cannot be put on the ballot for two years.
“We do have about $1.2 million of cash there, but we have some liabilities so that takes us down to the $972,000 fund balance,” he said. “If you take that in half, like you did this year, you’re down to $400,000. Do that again in two years there’s no cash in that general fund, so that’s when we need to look at the sales tax when we can in two years. Or, we look at cutting other departments, which I don’t think anyone wants to do that.”
Asked by Councilman Mark Dunn how many other departments might have to be cut to keep the EMS budget in tact, Hoback referred to Page 66 of the audit which listed revenue and expenses for each department.
“The police cost us $1.4 million, so I mean we can cut the police force if we want,” he said. “The library cost us $255,000. Parks and recreation, which includes the pool, costs $375,000. So I mean there are departments that if you just want to close the library and the parks, there’s maybe $500,000 you can save. We could cut some (police) officers, but I don’t think anyone wants to cut any of those programs.”

‘Not a money-maker’
Councilman Wayne Roblee then pointed out that the city council knew providing EMS services would come at a cost when the decision was made to take it over from the county in 2019.
“I think we knew that,” he said, “but the one thing about taking that over is that we knew it was a service. It wasn’t a money-maker. It wasn’t break-even. Like the swimming pool, that’s not a money-maker and it didn’t break even, either, but it was something we felt that we needed to do. Our community needed it. We did it. At that time we were told the same thing, that we needed a sales tax, and at the time we tried to get one. At any rate, the citizens said no, they didn’t want it, but I don’t think they want their pool closed. I don’t think they want the library closed, and I don’t think they want their emergency services shut down.”
Hoback said he understood that it took some time for the city to adjust to adding EMS under its umbrella of services, but emphasized that time is now running out, financially.
“When we took it over we had cash reserves so we had time to figure it out,” he said. “We haven’t figured it out and it’s to the point now where we have to figure it out. We don’t have much longer to go before the general fund has no cash. I mean, we’ve transferred a bunch out of water and sewer, so we’re putting that burden on the utility users when those rates should be going back into the water and sewer system. If that’s the service that we feel is important, it’s an expensive one, but we’re almost out of funding that we have.”

Community feedback
After Hoback concluded his report, Mayor Marlin Seeman asked a crowd of approximately 20 citizens if they had any questions or input, prompting a 20-minute discussion.
“Five years ago, the county lost $500,000 a year in handling the ambulance service,” noted Tim Lamprecht. “They said, whoa, that’s too much. Let’s find a better way. You guys took it over, you advertised to take it over, you wanted to take it over, and now you’re going to lose about $1.2 million. Explain that to me.”
Councilman Paul Lackore responded by saying the city’s decision to take over the EMS was based more on a desire to ensure that quality ambulance service was available to the community.
“That was the county’s decision,” Lackore said of the decision to go with the city rather than another proposal involving a private enterprise. “We’re doing what we can. Yes, it’s a financial expense. I will give you that. What we just need to do is to find from the citizens what services do they want provided. If we find out that the people in the city of Aurora don’t want an ambulance service, one of the easiest things for us to do would be to get rid of that service. But at the moment, that’s not the opinion that I’ve heard from the community.”
Paul Johnson, a local citizen who voiced concern about the property tax increase in September, said people may not be sharing their opinions because they aren’t aware of the city’s financial situation.
“You’re not hearing that from the community because they don’t know the cost associated with running it and that it’s broken the city,” Johnson said. “There’s no money. So if there’s no money in eight months we just shut down the city because no-one wanted to tell them?”
“We’re at the point where if people choose that they want this service, then they’re going to have to find out how to pay for it and what they would approve for a method of payment,” Lackore responded. “And if they choose that this is too expensive and they don’t want that service, then they need to let that voice be known, too. We have not heard the voice say we don’t want an ambulance or an emergency medical service system, yet. We’ve heard people complain that they don’t want to spend money, but we have not heard that the service is what they don’t want.”
At that point Jannelle Seim, who ran unsuccessfully as a write-in candidate for council based on her concerns with the property tax increase proposal and overall lack of transparency, asked the council if other options have been considered.
“Is there a happy medium between what we have now and no service?” she asked. “What are our options for scaling back services, but still having basic services within the community? I recognize that this is revenue, but if we do not have the transfer option, which requires us to have more busses (ambulances units), more personnel and more special education, and we only have what we need to serve our county, do we come out ahead?”
Seeman responded by saying the city has considered that option.
“What we’re trying to do is figure out if I reduce the business, I reduce the income,” Seeman said, while also noting that another city encouraged the county board there to contribute more toward its EMS budget shortfall. “If we could lower our expenses, we’re probably going to lower our performance in terms of fundraising. That’s what we look at, too. We still get back to the level of service you want. You know, what person do you want to show up at your door, or at your wrecked car?”
As the discussion continued, Roblee pointed out that running an ambulance service is an expensive venture, noting that some private entities have gone out of business due to rising costs.
“It’s difficult to keep people because we get them here and they love Aurora, they love the schools and love everything about it,” he said. “But you know, Grand Island, Hastings, Kearney or Lincoln comes along and they’ll offer more money and away they go after we have spent that time training them. I don’t know for sure what the answer is.”
Several citizens then suggested that the city study the issue, and share information with the community about what options to cut expenses or raise revenues are being considered.
Sam Moyer, a retired local banker, was the last to speak, saying that the citizens of Aurora have already spoken on the sales tax issue.
“The citizens have already made the decision, no new sales tax, and they didn’t make it 51 to 49, it was three to one,” Moyer said, referring to a failed sales tax vote in May. “Since that vote, what has the council done, what committees of the council, what people on the council, what alternatives have you considered to lower the trajectory of expenses since even your auditor said that you have to increase revenues or lower expenses? If the citizens aren’t willing give you more revenues, you don’t need to reiterate the problem that life’s tough. What alternatives and what committees are handling the projects to lower the costs, lower the expenses at the city, so that you can bring revenues and expenses back in line to make a difference?”
At that point the discussion turned into a heated debate, with the mayor eventually pounding his gavel and calling for the council to end the discussion and accept the audit report, which it did by unanimous vote.