With the city of Toledo's general-fund budget potentially $40 million out of whack, Mayor Mike Bell said Tuesday he will have his first sit-down Thursday with the leaders of city unions to discuss fixing the problem.
The mayor said he would discuss concessions with the unions but declined to offer specifics.
Cutting costs through concessions, such as asking city union members to pay for more of their pension plans, coupled with cutting millions from city spending, would be the precursor to asking voters to raise the city income tax, Mr. Bell said.
"What it is about is equal pain," he said. "We may find more efficiencies from our city than we thought, maybe $3 million or $4 million, and then let's say we get $16 million from pension pickups, that's $20 million, and we still have another $20 million [to go]."
Mr. Bell said he would not advocate a tax increase unless he can show Toledoans that he had succeeded in cutting costs.
Without those, the "options are not good for anybody," he said, alluding to the amount of cutbacks that would need to be made to equal $40 million.
Toledo City Council President Wilma Brown, who spoke with the
mayor about asking the unions to make midcontract concessions, said she hopes they are willing to talk.
The Finkbeiner administration handed over the city to Mr. Bell along with an estimated $40 million shortfall in the 2010 budget.
Steve Herwat, deputy mayor of operations, said the Bell administration is awaiting final revenue and expenditure figures for 2009, plus its own estimates for 2010, before announcing its own estimate for the deficit.
"On the revenue side, the latest projections we have from the finance department is that income tax collections will fall between $138.7 million on the low end and $140 million," Mr. Herwat said.
Regarding tomorrow's meeting, he said: "We are going to talk about the city's financial picture and what we need to do for a balanced budget."
Dan Wagner, president of the Toledo Police Patrolman's Association, said his members would likely not agree to reopen their existing three-year contract, which was approved in July.
"We gave a concession for six months, our guys were laid off, and they still couldn't balance the budget," Mr. Wagner said. "I think it is a little premature for [Mr. Bell] to be coming to us since it is only his second week and he is relying on budget numbers from the Finkbeiner administration."
Last year, then-Mayor Finkbeiner laid off 75 police officers in addition to other city employees, slashing hours, and mandating furloughs.
Mr. Wagner said he is suspicious of the proposed 2010 budget offered by Mr. Finkbeiner before leaving office.
"I found over $1 million alone in health-care costs that was over-budgeted," he said. "You have overbudgeting and you could easily find $20 million, plus you have Finkbeiner saying we are going to make even less money than we did last year, but the economy is going to be turning around."
Mr. Wagner made similar claims about the city's economic woes last year, but he turned out to be wrong as city tax revenues continued to fall.
Mr. Finkbeiner's proposed 2010 budget assumed the city would collect more than $147.17 million from income taxes this year. To balance the budget, he urged Toledo City Council and Mr. Bell to raise the city's monthly refuse collection fee to $16, eliminate the tax credit for Toledoans who work outside the city, and consider seeking voter approval to raise the income tax from 2.25 percent to 2.5 percent.
But last month, University of Toledo professors David Black and Oleg Smirnov predicted a range of just $135.2 million to a low of $129 million for 2010 income tax collections.
Mr. Herwat said the Bell administration would present its own 2010 spending plan.
The police and fire contracts required officers and firefighters to pay into their share of their pension premiums for just six months, which is nearly complete. The city will now resume making the entire 10 percent employee share of the pension payment. That is on top of the employer's contribution of 19.5 percent.
Any newly hired police officers and firefighters will pay the full 10 percent of the employee's pension share.
The contracts also granted a 3.5 percent pay increase beginning Jan. 1, 2011, and will pay deferred overtime payments to police and fire for the second half of 2009 on March 1. Police officers and firefighters may choose to take compensatory time instead of being paid for their overtime.
Alan Cox, president of AFSCME Local 2058, said he expects the mayor to raise the possibility of concessions tomorrow.
"It would not surprise me if he broached the issue, but since he has a committee that's reviewing the issue, I don't think he will make any specifics until he indeed knows what the issues are," Mr. Cox said.
Mr. Bell appointed a "Citizens Special Investigation" task force to analyze income and expenses, pension and benefit liabilities, and overtime costs.
Don Czerniak, president of American Federation of State, County, and Municipal Employees Local 7, also said his union would not agree to concessions - in part because the Finkbeiner administration "wasted millions and millions" on the proposed Marina District development in East Toledo.
"Would I be in favor of concessions? No," Mr. Czerniak said. "We went with no raises and our pensions pickups were in lieu of raises in the past."
Contact Ignazio Messina at:
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