The lame duck Hicks-Hudson administration Wednesday released its proposed general fund and capital improvements spending plans for 2018 — budget documents that are expected to be altered by Mayor-elect Wade Kapszukiewicz when he takes office in January.
Mayor Paula Hicks-Hudson's proposed $258.21 million 2018 general fund budget — which is down slightly from $258.87 million this year — predicts Toledo's economy will grow again next year and that the city will collect a record-high amount from the 2.25 percent income tax.
The general fund earmarks money to hire 40 new police officers in July and 30 new firefighters in August, and the proposed capital improvement budget allocates $8.75 million for residential street repaving without the need to borrow money.
“As I prepare to leave office, I am confident that I have left the citizens of Toledo in a better fiscal position than when I started due to budget-saving measures, operational changes, and sound fiscal management,” the mayor wrote in a letter to Toledo City Council.
The mayor is required by city charter to annually present a balanced budget for the following year by Nov. 15. Council has until March 31 to approve the budget.
The outgoing mayor proposed taking $5.25 million out of the city's capital improvement fund — the pot of money used for permanent improvements like street repair — and transferring it into the city's general fund for costs like police and fire salaries. Mayor Hicks-Hudson said the city can reduce the transfer chiefly because of criminal justice system savings after costs were shifted to Lucas County.
Toledo Police under the direction of the late Mayor D. Michael Collins stopped charging misdemeanor defendants under the Toledo Municipal Code and start using the Ohio Revised Code. The change shocked Lucas County officials, who by law are required to pay to incarcerate people charged under state code, but instantly saved the city of Toledo $5 million to $8 million a year.
The transfer from the capital budget to the general fund has been used by three mayoral administrations since 2011. A 2010 ballot initiative approved the transfer of money.
When council approved the city's 2017 capital improvements and general fund budgets in March, it had last-minute budget amendments to reduce the 2017 capital improvement transfer from $11.5 million to $11,067,300.
Ms. Hicks-Hudson said the 2017 transfer could be reduced further.
“This budget contemplates a reduction from over $11 million in the prior year’s budget to $5.25 million,” the mayor's letter said. “Additionally, current projections for year-end 2017 indicate that there will be additional funds available in the general fund, thus reducing the 2017 capital improvement fund transfer.”
The city closed the books on 2016 with a $3 million transfer from the capital improvement fund to the general fund. Toledo City Council President Steven Steel said the transfer was unnecessary; council ultimately moved the money back, and voted 11-1 on Oct. 31 to approve an ordinance to spend $3,350,000 on various capital projects.
The transfer in 2015 was $9.5 million.
Mayor Hicks-Hudson's administration said the city's 2.25 percent income tax will generate $178 million in 2018.
That is up from the $173.65 million that the city expects to collect in 2017 from the payroll tax.
The city predicted it would collect $170.7 million from the tax in 2016, according to the 2016 general fund budget. The prediction was low. It actually collected $175,679,318 in 2016.
The city collected $168.98 million from the 2.25 percent income tax in 2015.
The $8.75 million budgeted for residential road repaving next year is slightly down from what was spent this year.
The city budgeted $9 million in 2017 for residential road repaving.
Mayor Hicks-Hudson announced increased funding for residential repaving in May, after the city discovered that it had over-budgeted for workers compensation and health-care costs last year by millions of dollars. At that time, she said the city would have another $4 million for capital projects, with the money coming from a number of sources in the city's 2016 budget. She also asked council to allocate $1.5 million for equipment and vehicle replacement, and $500,000 more for sidewalk repairs this year.
The 2018 budget allocates another $1.6 million for the city's mill and fill repaving program.
Toledo will also spend $5.44 million in 2018 to repave main roadways matched with $11.77 million grants and loans, according the proposed capital budget.
Mr. Kapszukiewicz said members of his team met Wednesday with the mayor's chief of staff, Mark Sobczak, to discuss the budgets.
“It is the first formal, structured conversation between my team and the mayor's team so I think a lot of progress will be made,” he said. “I have always viewed a budget as an opportunity for the conversation to start, not an indication the conversation should end, so I anticipate some changes in the budget, and that is natural since this is always the first draft. My sense is that it will be tweaked and amended several times.”
Mr. Kapszukiewicz said he will be sure the budget has money set aside to hire 40 police officers.
He promised during the campaign this year to hire 40 officers a year each year of his four years in office for a net increase of 60 police officers after retirements.
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