Toledo City Council approves balanced budget, imposes cuts for most unions
3/30/2010“Maybe it's not the perfect situation, but it may be a little more palatable to the general public,” Mayor Mike Bell said shortly after Toledo City Council voted 8-4 to approve the 2010 budget.
“I feel good that we took something that was so huge — a $48 million deficit when I took office — and now we have brought that to a slight surplus,” the mayor said.
The Bell administration took office in January with a predicted $48 million deficit and the current spending plan now predicts a $487,534 surplus for 2010 and does not require any city layoffs, which the mayor had previously proposed for 125 firefighters and 125 police officers.
After lengthy debates on all of the measures Mr. Bell had proposed to balance the budget, council hiked the trash fee to $15 a month and reduced from 100 percent to 75 percent the tax credit for those residents who work outside the city and pay an income tax to another locale.
The trash fee however will be reduced to $12.50 a month in 2011 under the ordinance council passed.
Additionally, Mr. Bell promised last night to reduce the trash fee further — especially for senior citizens — and to also roll back the tax credit to 100 percent if voters in May approve Issue 5, which would allow the city to use more money allocated for the capital improvements fund for general operating expenses.
Voting in favor of the trash fee increase were Councilmen Phillip Copeland, Mike Craig, Adam Martinez, Joe McNamara, George Sarantou, Steven Steel, Michael Ashford, and Wilma Brown. Voting against were Rob Ludeman, Tom Waniewski, Lindsay Webb, and D. Michael Collins.
Mr. McNamara, Mr. Waniewski, Ms. Webb, and Mr. Collins were the four who voted against the budget.
Voting in favor of the tax credit reduction to 75 percent were Mr. Copeland, Mr. Craig, Mr. Martinez, Mr. Sarantou, Mr. Steel, Mr. Ashford, and Ms. Brown. Voting against were Mr. Ludeman, Mr. McNamara, Mr. Waniewski, Ms. Webb, and Mr. Collins.
A 75 percent credit requires a Toledoan working in Oregon, for example, where the income tax rate is identical to Toledo's 2.25 percent, to pay an additional 0.56 percent to Toledo.
Mr. McNamara said he voted against the tax credit decrease because it provided too great an incentive for those Toledoans to move out of the city, but in favor of the trash fee hike because surrounding communities have similar or higher fees.
The trash fee will generate $11.1 million for the general fund.
The budget was approved last night just one day before a mandatory deadline.
After debating for months, and undergoing a series of revisions, members agreed to impose “exigent circumstances” on most city unions.
The exigent circumstances approved by council call for unilateral cuts for all exempt employees as well as members of the Toledo Police Command Officers Association, Toledo Fire Chiefs Association, AFSCME Local 7, Toledo Police Patrolman's Association, and AFSCME 2058.
The vote means the union employees will have to begin picking up the 10 percent share — what the city is currently paying — of their pension contribution for the remaining nine months. They also would need to make a contribution to their health care costs based on a sliding salary scale.
The cuts will not be imposed on Toledo Firefighters Local 92, with whom the city has reached a memorandum of understating that calls for $3 million in concessions. Council also postponed action on the Teamsters exigent circumstances for two weeks as they discuss possible agreements.
Mr. McNamara, Ms. Webb, Mr. Steel, and Mr. Collins cast votes against imposing the cuts. In some instances, Mr. Ashford also voted against the union cuts, meaning the votes cast were either 8-4 or 7-5 in favor of having the union members take concessions.
Council members also voted to eliminate pension pickups and increase health-care costs for nonunion employees. Ms. Webb and Mr. Collins voted against that measure.
After meeting for about an hour Tuesday afternoon, members of council broke and began discussing behind closed doors in executive session regarding the legal ramifications should they decide to impose the cuts on some city unions.
Mr. Collins, a retired police officer and former TPPA president, said he voted against the exigent circumstances “as an elected district representative” and not a former union of the police union.
“I do not feel the collective bargaining process had been fulfilled and I was not convinced in executive session the administration's argument has sufficiency to prevail in litigation.”
TPPA President Dan Wagner said the union is prepared to file a request today for a temporary restraining order in court to fight having the patrolmen's existing contract changed and cuts imposed.
“It's unfortunate because now with this step, it probably endangered any possibility of sitting back down with administration,” Mr. Wagner said.
Mr. Bell said he is still willing to talk with any union but that the city is also prepared to fight the TPPA's temporary restraining order request and said layoffs would be back on the table if the exigent circumstance measures could not be sustained.
The mayor had sent 30-day layoff notices to police officers in case he could not reach an agreement with the unions or have council approve the forced concessions.
The TPPA rejected a deal almost identical to the Local 92 firefighters agreement, which would have also spared them the greater cutbacks imposed by council last night.
Mr. Wagner also said there were rumors last night that police officers would call in sick in protest of the cuts to their retirement and health benefits.
“That would be a bad move,” Mr. Bell said of the rumored police sick-out, which is commonly called “blue flu.”
Council also voted 7-5 last night to increase the expected 2010 income tax revenue to $138.1 million from $136.1 million.
That was done at the suggestion of Mr. Sarantou.
Mr. Collins had suggested the 2010 income tax assumption be increased to $142 million, which is $300,000 more than was collected in 2009.
Mr. Bell, Mr. McNamara, and Mr. Martinez openly questioned the wisdom of increasing the assumption that high.
“I want you to be right. I really do,” Mr. McNamara said. “But I think the consequences of being wrong are too great.”
If the city falls short of its expected income for the year, it could face a deficit late in 2010 — which was the case at the end of last year and left a carryover deficit of $8.45 million.
The Bell administration dropped its plan to ask council for an 8 percent entertainment tax that would have generated $1 million this year and in turn completely eliminated the tax credit.
Earlier in the day, Mr. Bell had proposed cutting the tax credit to 50 percent but changed it to 75 percent during the course of last night’s 5 -hour meeting.