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The Ohio Public Employee Retirement System has ruled that Lucas County will be required to contribute to the pensions of Toledo refuse workers who are laid off and then go to work for Allied Waste Management, the private company taking over trash collection in the city.
Last month, the Lucas County Commissioners approved the private takeover of Toledo's trash collection. Under the plan, the city handed over authority for trash collection to the county, which in turn hired private waste hauler Allied Waste. The agreement eliminated 66 union positions, though officials say few of those employees are likely to not have jobs.
Under OPERS rules, public employees whose jobs are lost through private contracting and continue to do the same work are eligible to continue contributing to the system's pension. If they do, their former public employer would have to contribute its share as well. The city asked OPERS for a ruling.
"On review of the agreements, we find the city employees will be transferred to Lucas County," the OPERS ruling dated June 7 said. "The county will then transfer the employees to Allied Waste. We have determined that any employees transferred to Allied Waste will be a public employee defined" under the Ohio Revised Code.
County Commissioner Pete Gerken said the ruling is being appealed. The city filed the appeal Tuesday.
"We were shocked when the opinion came back that there would be OPERS continuation and the county would be responsible," Mr. Gerken said. "These employees never have been and never will be county employees. I think it is a misunderstanding on the part of OPERS."
Mr. Gerken said the county is proceeding with the switch to private collection in the city.
"The city has offered to put additional language through if by some outcome the county were responsible for OPERS, that they would be responsible for it," he said.
The possible financial impact for the city is still unknown.
Toledo Deputy Mayor of Operations Steve Herwat previously said if the city is liable for the pension costs, the worst-case scenario would be about $460,000 a year. Then he noted the plan to switch to a private hauler would save $2.8 million this year if the change occurs by Sept. 1.
"That would have been the exposure if every individual let go would go to Allied. That will not be the case," he said. "We are trying to match our existing solid-waste employees with other jobs in the city that are open. ... For example, do we have a vacancy in streets that we can offer one of the solid waste workers?" He said only about a dozen city employees would go work for Allied -- far fewer than the number being laid off.
"We are in the process of appealing to OPERS because, frankly, I do not know how they connected the dots that they would be county employees," Mr. Herwat said. "They will never at any point during this transition be county employees."
Under the agreement approved by the county, most city of Toledo households will pay $8.95 a month for trash and recycle service. Seniors who qualify for a homestead exemption will continue to pay $5 a month. Residents still will be billed through the city utility department.
Councilman D. Michael Collins Wednesday said he warned both the city and county of this possibility.
"I hope a lesson has been learned that when you rush into these decisions, such as transferring of the solid waste operation to the county," he said. "I felt confident when I went on the record saying that ultimately the county would be responsible for the pension pickup."
Contact Ignazio Messina at: firstname.lastname@example.org or 419-724-6171.