Mayor Mike Bell sent his balanced budget proposal to Toledo City Council Monday afternoon and it contained a number of recommendations to address a deficit of nearly $49 million - including a controversial idea to alter union contracts without negotiations.
The budget proposal includes the anticipation of elimination of all employee pension pickups and greater employee contribution for health insurance from both union and exempt employees.
"The unions have so far rejected or neglected any request to contribute to a solution for the budget, leaving the Mayor with no choice other than to send ordinances to council declaring exigent circumstances in order to legally alter the collective bargaining agreements," said a statement from the mayor's office.
"There is no chance of balancing the 2010 budget without severe service cuts unless the unions yield," the statement said.
During a news conference Monday afternoon, Mr. Bell said he had to ask council to agree to the exigent circumstances because union concessions are a crucial component of his plan and the bargaining units' presidents rejected his requests.
"I have asked for voluntary cooperation from the stand point of our unions to get involved, and that issue has to be addressed in the future so we are going to continue to move forward," he said.
When asked if he thought the unions would challenge the move in court, Mr. Bell responded by saying no part of his plan would be easy.
"I do see it as being necessary," he said. "Structurally, we are out of line and we have to be able to put ourselves back in line."
Former Mayor Carty Finkbeiner last March asked council to declare "exigent circumstances" in order to force wage and pension cutbacks on the police union outside of ongoing negotiations but it was never taken to a vote.
Mr. Bell also wants to charge Toledoans who work outside the city more income taxes.
In addition to eliminating the income tax credit for those working outside of the city, Mr. Bell's plan includes cutting approximately $10 million in spending, enacting an 8 percent sports and event tax, and a $15 refuse fee with the establishment of a solid waste enterprise fund to which the revenue would be dedicated.
He also wants to maintain a fire class sworn in this January and hire a new police class in September.
Last week, the mayor received terse letters from the presidents of the Toledo Police Patrolman's Association, led by Dan Wagner, and Firefighters Local 92, led by Wayne Hartford, who said their members had given enough.
The city inked three-year contracts in July with the TPPA and Local 92.
"During the bargaining, the city and the TPPA were cognizant of the city's projected financial hardship over the next three years, and this understanding drove the concessions that resulted in an agreement," wrote Mr. Wagner.
"The city foresaw a shortfall in the tax revenue which the TPPA investigated and responded to by its members' agreement to concede a 7 percent loss due to pension giveback, and the higher health-insurance costs - all in the midst of the lowest manpower slump in the modern history of the Toledo Police Department," Mr. Wagner wrote.
His letter ended by questioning the "legitimacy of the city's request" but left the door open for future talks.
Mr. Wagner softened his stance and reiterated that he is still willing to talk to the mayor.
"It is premature for us to accept or deny any concessions," he told The Blade Wednesday. "He wants us to make a decision on an offer he made without an ability to refute or rebut, so I think it's premature that we would entertain a deal."
Mr. Bell had also suggested city workers should take a 10 percent wage cut, but he pulled that off the table at the same time he withdrew his request for voters in May to increase the city's income tax by another 0.25 percentage point.
Mr. Hartford, president of Firefighter Local 92, responded in a similar manner in his letter to the mayor.
"Your letter prompts Local 92 to remind the city of the 7 percent cut, two-year wage freeze, and health insurance givebacks Local 92 recently accepted," Mr. Hartford wrote to the mayor.
"These significant givebacks placed many Local 92 members and their families on the precipice of financial ruin," he wrote. "Your 'request' for another 15 percent would only push numerous firefighters over the financial edge, causing irreparable harm not only on an individual basis but to the department and the city as a whole."
While the police and fire unions did agree to concessions in the contracts that were approved mid-2009, some of the cutbacks were temporary.
The contracts required officers and firefighters to pay into their own pension plan for six months, froze wages for two years, and required them for the first time to pay a portion of their health insurance costs.
In exchange for the half-year partial pension pickup, the patrolmen and firefighters got an additional 6 1/2 vacation days through Dec. 31, 2009.
But at the same time, the contract grants a 3.5 percent pay increase beginning Jan. 1, 2011.
Also, after the first six months under the contract, the city resumed making the entire 10 percent employee share of the pension payment, which is on top of the employer's contribution of 19.5 percent.
Any newly hired police officers will have to pay the full 10 percent of the employee's pension share.
The contract also deferred all overtime payments for the remainder of 2009 until March 1, but police officers may choose to take compensatory time instead of banking their overtime.
Toledo City Council voted 8-3 on July 7, 2009 to approve the police contract after the Finkbeiner administration negotiated it.
Council voted 10-1 on July 28, 2009 to approve the Local 9 agreement.