The future of a downtown Omaha streetcar, and relations between two major public players, has taken two steps forward and one step back.

The Omaha City Council on Tuesday okayed at least $360 million in bonds, paving the way for what many city leaders insist is a transformative project, long in the making.

At the same time the Metropolitan Utilities District and the city continue to spar over who’s paying what.

MUD first insisted that ripping up streets was forcing the utility to raise its rates.

Mayor Jean Stothert countered that MUD was raising rates, streetcar, or no streetcar.

Both sides now seem to believe the costs can be mutually worked out.

At the same time though there was this less than friendly exchange Tuesday between City Council Vice President Vinny Palermo and MUD VP Mark Mendenhall:

[Look and listen to the tense talk above]

Mark Mendenhall, MUD: What I am able to say is that we are here, and we expect to continue to work with the city.

Vinny Palermo, City Council (D): I heard you come up and say you're going to work in good faith with the city but what I know is that MUD owes the city about $2 million right now for street cuts.

Mendenhall: And the question is?

Palermo: Will you work in good faith with the city to help with the bills that MUD owes the city?

Mendenhall: I will say with absolute confidence we’ve done nothing but work in good faith. To the best of my knowledge Mr. Palermo the District is well caught up and your $2 million figure, I don't have the benefit of whatever you're looking at, I honestly don't know what you're talking about.

Palermo: Mr. Curtis. Tough question for you but are you aware of any payments that MUD has with the City of Omaha that have a long window of past due?

Steve Curtis, Omaha Finance Director: Yes.

Palermo: Do you know about how much that amount would be?

Curtis: I know the total outstanding is about $1.8 million.

Palermo: Thank you Mr. Curtis. Thank you, Mr. Mendenhall.