Buyouts may be on tap for city of Toledo workers

5/5/2007

Some of the city of Toledo's most veteran employees might soon pack up their belongings and head into early retirement, while city managers will shell out more for health coverage under a plan by city officials staring down a projected $14 million budget shortfall next year.

Mayor Carty Finkbeiner said yesterday that 122 of the city's workers have at least 32 years of service.

If the retirement packages are approved by City Council, the city would pay eligible employees half of their remaining salary this year to retire, plus severance packages that include unused vacation and sick time.

If all eligible employees took advantage of the plan, it could save the city up to $1.4 million, although the mayor said he expects the savings to be closer to $750,000 to $1 million.

The mayor said the buyouts shouldn't affect city services. For one, some older workers will be replaced by lower-paid, newer workers.

"We can work smarter and we can work harder too," he said.

The mayor also proposed that the city's 235 nonunion employees pay $30 to $90 a month to help cover health-care costs.

Currently they must shell out $10 to $15 copays, but they do not directly contribute to the city's self-insured medical plan, said John Sherburne, the city's finance director.

Saying, "You lead by example," the mayor added he will talk to the city's unions about helping pay for health care. If unions agree, it could affect 2,162 employees and save the city $1.7 million or more a year, he said.

The city has about 2,900 employees, but Teamsters members and firefighters get health care coverage elsewhere, he said.

Still, the suggestion didn't go down well with Rick Wise, of the Toledo Police Patrolman's Association. The city recently approved spending nearly $40,000 to plant flowers and another $50,000 on Toledo Sister Cities International - not to mention other programs some would consider unnecessary, he said.

"Now how do I go back to my fellow officers and say, 'How about giving up some of your health care?'•" he said.

That health-care plan for managers also must be approved by council. Already there are concerns, Councilman Frank Szollosi said.

Mr. Szollosi said that the mayor can expect an amendment that would be more "income sensitive" and said he and Councilman Joe McNamara have discussed a tiered system that would be based on salary.

"We don't think it's fair for someone who is making $90,000 a year to pay the same as someone making $25,000 a year," he said.

The city is looking at several other ways to close any 2008 budget shortfall, including selling off bits of land - from small lots to a property of "significant value," Mr. Finkbeiner said.

Mr. Finkbeiner declined to identify the property of "significant value."

Andy Ferrara, manager of real estate for the city, said Toledo owns more than 900 residential lots, in addition to park land, unused park parcels, commercial real estate, and others.

The city also is in talks with neighboring communities about joint economic development zones and districts. Such commercial real estate generates taxes for both Toledo and communities around it.

The real budget help is not in the money that would be made upfront by selling the real estate, but in the long-term tax base that could be built up as those lands are developed.

Contact Robin Erb at:

robinerb@theblade.com

or 419-724-6133.