The city of Toledo has $5 million left over from 2012, and Mayor Mike Bell, who is in the middle of running for re-election, wants to dedicate half of that money to street repairs.
The mayor, who announced the “positive general-fund balance” during an afternoon news conference on Thursday, said the money came from higher-than-expected revenues and lower-than-expected expenses.
“When we took office in 2010, we started with a $48 million deficit and where we are sitting today is about a $5 million surplus in 2012, so we have come a long way,” Mr. Bell said. “We have had to make some hard decisions that have been criticized, but at the same point in time, it has worked and we are starting to move in the right direction.”
But leaders of Toledo’s two largest public-safety unions said it is clear to them that the freshly found surplus is a result of concessions their members made in their latest contracts.
“We have higher insurance and we gave up our complete pension pick-up. That saved the city well over $3 million,” said Dan Wagner, president of the Toledo Police Patrolman’s Association. “If there is a true surplus, it’s largely due to concessions by us, the command officers, and the firefighters.”
Dan Desmond, vice president of Local 92 of the International Association of Fire Fighters, said fire-service cuts have compromised public safety in Toledo.
“We came to the table in 2010 because of the so-called $48 million deficit, and are working more for less,” Mr. Desmond said. Now that there is a surplus, he said, the Bell administration should look to restore some of the cuts made when there were deficits.
While the general fund may have the $5 million surplus, the Bell administration in 2012 still siphoned $9 million out of the city’s capital improvements budget, money dedicated toward big projects and street repair, to keep the general operating fund in the black.
Mr. Bell said the city for years has used capital improvements money for the general fund, which was authorized by voter approval. “We are working to wean ourselves off the CIP,” he said.
Mr. Bell admitted that the surplus is politically fortuitous.
“I think having good money in a system that was broke is absolutely good for anyone who is trying to be elected,” the mayor said.
The mayor also used the opportunity to highlight the number of police officers and firefighters hired under his watch.
“By the time 2013 ends, we will have added 165 police officers, 172 firefighters, and we will have also built 2½ stations utilizing money out of the capital improvements fund,” Mr. Bell said. “This is a little bit different compared to some other cities actually in Ohio and just right up north in Detroit.”
The general fund has the extra $5 million because 2012 spending was $6 million below expectations; revenues were $3 million over-budget, and the Bell administration took $4 million less from the capital improvements budget than expected.
“The city had intended to use $13 million from the CIP budget but only had to take $9 million,” said Patrick McLean, the city's finance director. “That is how we come to $5 million."
The revenues were up chiefly from greater-than-expected income tax collections, Mr. McLean said.
The city last year took in $158.52 million from the 2.25 percent income tax, about $3 million over budget and up from $153.58 million in 2011 and $144.58 million in 2010.
“Ending with $5 million ... is going to allow us more flexibility than we’ve had in the past,” Mr. McLean said. “That is on the strength of more people working, of course. There are some 4,500 more people working now than were working in 2010.”
Mr. McLean said lower expenses and higher revenues allowed the city to take less out of the capital improvements budget than officials had planned at the start of 2012.
“The $6 million [less in spending] was in part because we didn’t have as many severances, as many people retiring ... the other news is across all of our fund centers, almost all of our departments were below budget,” he said.
Mr. Bell’s opponents for his mayoral seat were cautious on hearing the news.
“I would like to take a look at the numbers and make sure that is really balanced because the last time the mayor claimed there was a surplus, it was an accounting trick,” said Councilman Joe McNamara, a Democrat running against the independent mayor and others this fall.
Mr. McNamara said the 8.4 percent unemployment rate and that homicides were up in 2012 over 2011 would work against Mr. Bell more than the $5 million surplus would help him.
The unemployment rate when Mr. Bell took office was 13.8 percent.
In December, 2012, after some disagreement, a majority of Toledo City Council sided with Mayor Bell in declaring that the city did in fact have a $326,000 surplus left over from 2011 that could be saved in Toledo’s rainy-day fund.
Councilman George Sarantou said the $5 million surplus was positive news but noted that there is still a heavy reliance on the capital improvements budget to keep the general fund balanced.
Lucas County Auditor Anita Lopez, another Democrat in the mayor’s race, did not respond to a request for comment. Her spokesman, Billy Benner, said she had another engagement on Thursday and instead sent a statement.
“It’s funny that one of the reasons cited by both Governor Kasich and Mayor Bell for supporting [Senate Bill 5] in 2011 was to save money,” the statement said. “It seems the city found a way to do this without the egregious attack on working families. However, it is unfortunate that this claim is shadowed by the questionable shell games of shifting CIP dollars to the general fund.”
Mayoral candidate Councilman D. Michael Collins, an independent, said the surplus announcement was curious since the city’s 2013 first quarter financial report was not rosy.
First quarter revenues were down for a number things, Mr. Collins said, including licenses and fees, red light and speed cameras, and money from the casino.
Contact Ignazio Messina at: firstname.lastname@example.org or 419-724-6171.