City amasses $17 million in unpaid water invoices
5/20/2009The city of Toledo is sitting on $17 million in unpaid water bills, the mayor said yesterday.
Mayor Carty Finkbeiner said he was not pleased with the amount and said the city water department had "really deteriorated" over a number of years. He did not elaborate.
Tom Kroma, recently appointed director of public utilities, said the bills have accumulated over a considerable period of time.
"If you foreclose and abandon your property and disappear, I am going to have a hard time collecting on that debt," Mr. Kroma said. "We do post tax liens on properties to collect that money, and at some point in time, we intend to collect some of those funds."
Mr. Kroma said all utilities struggle with nonpaying customers.
"If you do some homework, you will find every utility has a portion of uncollectible debt - Columbia Gas, Toledo Edison - that's the nature of the business," he said.
The money collected from water bills is separate from the city's general fund, and is not supposed to be used to pay for salaries of po-lice and firefighters, for example.
The city's general fund is currently projected to be about $15 million short this year, unless the city increases its revenue or makes more cutbacks, John Sherburne, city director of finance, said yesterday.
That deficit is down from $27.7 million after some layoffs and other cuts the city has made since revenue estimates plunged in February.
The city on Friday laid off 48 employees to save money in the general fund. The layoffs were in addition to 75 police officers who were pink-slipped on May 1.
Thirty-seven of the 48 whose jobs were eliminated found jobs in departments supported by other funds, such as streets and utilities.
The mayor said the cutbacks were forced on the city because of the abrupt decline in city income tax revenues. The 2009 budget of $169.7 million in tax revenues was slashed to $145 million in February.
The general fund pays for police and fire protection, the jail, courts, City Council, the mayor's office, law, human resources, planning, parks, and solid waste. Its major source of revenue is the 2.25 percent income tax, which was last raised in 1982 when city taxpayers approved a 0.75 percent renewable tax.
The police layoffs occurred in the midst of tense labor negotiations with the Toledo Police Patrolman's Association.
Mayor Finkbeiner is seeking significant concessions from the patrolman's union.
The city and the union are at an impasse in their negotiations and are to meet with a fact-finder May 28.
The mayor is seeking a 10 percent pay cut, an end to the city paying the 10 percent employee pension contribution, and a contribution toward the city's health insurance costs.
The outcome of the talks could set the pattern for other city unions that have yet to settle.
To raise revenue, the mayor is asking council to reduce the 100 percent income tax credit given to Toledoans who work and pay income taxes outside the city to 50 percent and to raise the monthly trash collection fee.
So far, council has refused to approve the mayor's revenue enhancement proposals, with council members saying they won't act until the unions have made concessions.
- Ignazio Messina