Outgoing Toledo Mayor Mike Bell on Thursday handed over his last proposed general fund budget, an austere spending plan for 2014 that suffers from increased labor costs and the loss of state money, and is also requiring the city to take millions from street repair.
Mayor Bell, who was defeated last week by Councilman D. Michael Collins, said the budget is balanced “in a way that is fair.” The proposed budget offers little wiggle room with a $20,000 surplus predicted by the end of 2014.
“The most difficult part is that we don’t have the $3.4 million from the estate tax that we had in place this year, so we cannot wean ourselves off the capital improvements budget as quickly as we’d like to,” Mayor Bell said.
■ $165.24 million in expected revenue from the city’s 2.25 percent income tax, up from $163.87 million.
■ General fund spending proposal of $244.76 million is up from $244.57 million in 2012.
■ Proposed general fund spending totals $244.76 million, leaving a $20,000 surplus at the end of 2014 in that budget.
■ Budget assumes casino revenue increase of $600,000 to a total of $5.6 million.
■ Red light and speed traffic cameras expected to generate $3.2 million, which is $1 million less than 2013 budget.
■ City won’t get $3.4 million from state estate tax that it received in 2013.
■ Money to hire 30 new police officer recruits in December, 2014, but otherwise recommends a hiring freeze.
■ The Bell administration is again recommending the city transfer $14.1 million from the capital improvements plan budget — the same amount taken out of that fund to balance the general fund in 2013.
The city also faces reduction in the state’s local government fund, which will be cut to $8.1 million from $8.6 million in 2013 and $13.9 million in 2012.
“The budget is extremely lean but we are not leaving them in a bad way,” Mayor Bell said. “I put it together so [Mr. Collins] would start on high ground or equal footing to where I would have started the budget process in 2014.”
The proposed budget, submitted to Toledo City Council one day ahead of the annual Nov. 15 deadline, includes $165.24 million in expected revenue from the city’s 2.25 percent income tax, which is the largest source of money for the general fund. That is about 2 percent over the 2013 estimate of $163.87 million. The city collected $158.5 million in 2012 and $153.5 million in 2011.
Total revenues across all funds in 2014 are predicted to total $657.8 million while spending will reach about $653.5 million. General fund revenues are budgeted at $244.78 million and Mayor Bell’s proposed spending will total $244.76 million — leaving the $20,000 surplus at the end of 2014 in that budget.
The Bell administration is again recommending the city transfer $14.1 million from the capital improvements plan budget — the same amount taken out of that fund to balance the general fund in 2013.
Mayor-elect Collins and Councilman George Sarantou, chairman of council’s finance committee, both said that number should be reduced.
“I am very concerned about this budget calling for more than $14.1 million coming out of the CIP,” Mr. Collins said. “We did it this year but the CIP budget is not a rainy day fund and to assume that this is the cure is not responsible fiscal management... We cannot continue to kick the can down the road.”
Mr. Sarantou said the city’s reliance on the capital improvements budget to pay for general fund operations like police and fire hurts Toledo’s standing with bond rating agencies that assess the city’s ability to borrow money.
Mr. Sarantou, who was barred by term limits from seeking reelection, said he is also concerned about Mayor Bell’s estimate from police and fire overtime.
Mayor Bell’s proposal leaves money for 30 new police officer recruits to be hired in December, 2014, but he has recommended “the majority of other vacancies” not be filled. There is no funding for new firefighters in the proposed budget but the city expects to administer a firefighter civil service exam in May, 2014, Deputy Mayor Steve Herwat said.
Fire overtime is budgeted to be $1.7 million, down from $3 million in 2013. Police overtime is budgeted at $2.2 million, down from about $2.8 million this year.
Mr. Herwat said newly hired police officers and firelighters in training now will allow the city to slash overtime costs next year.
“We have 75 police officers who will graduate in April and they will have no vacation time in 2014,” Mr. Herwat said. “That will put us just over 650 police officers.”
After retirements, he expects the city to have about 620 police officers next year.
The city will have 51 new firefighters graduating early next year, bringing the total number to 535. But 15 are expected to retire in 2014.
Dan Wagner, president of the Toledo Police Patrolman’s Association union, said the increased manpower makes the reduced overtime possible but he cannot say for sure.
“We could have an increase in violence where they have to increase the manpower on certain shifts,” he said. “But you cannot predict what is going to happen.”
The budget is also stressed by contractually-obligated pay raises for the safety forces.
Rank and file firefighters who belong to Toledo Firefighters Local 92 will get 3.5 percent raises in August; battalion chiefs get 3 percent increases in January, and police officers get 3 percent pay raises in July.
Mayor Bell’s last budget assumes casino revenue will increase $600,000 to a total of $5.6 million but at the same time it assumes the city will get $3.2 million from red light and speed traffic cameras, which is $1 million less than the 2013 expectation. Additionally, the city could have to give up that money if the state approves a spending ban on the devices. House Bill 69 banning red light cameras passed the House and is under consideration in the Ohio Senate.
The budget could go through revisions by Mayor-elect Collins after he takes office Jan. 2. Toledo City Council must approve the budget by March 31.
Council President Paula Hicks-Hudson said the budget is “tight” and would be challenging to keep balanced.
“We are going to have to take a look at it and make sure it is clear what is going to happen and with the new administration,” she said. “I don’t anticipate any acrimony.”
The overall general fund spending proposal of $244.76 million is up from $244.57 million in 2012. Mayor Bell proposed cuts to most departments, such as reducing youth commission funding from $159,132 to $113,545 and the municipal court budget from $14 million to $13.9 million.
Those cuts are offset by increases in the departments of affirmative action/contract compliance, law, fire, and inspections. The fire department had the largest proposed increase — jumping up almost $3.9 million to $65.95 million.
Mr. Collins campaign promises included slashing 30 percent out of the mayor’s office budget, which in 2013 was $821,375. Mayor Bell’s proposal reduces it to $820,510. Mr. Collins' promise requires him to cut it to $575,000.