Raid on rainy-day fund urged by mayor

11/18/2003

City Councilman Wade Kapszukiewicz observed yesterday that for Toledoans, “Today is a rainy day.”

Mr. Kapszukiewicz wasn t talking about the weather, but rather the revenue woes that will cut further into Toledo s rainy-day fund. With the city facing a $10 million shortfall next year, the only question is how deeply to borrow from the fund.

Mayor Jack Ford formally unveiled his $235.8 million general-fund budget yesterday, which outpaces revenues by $10 million.

The mayor proposed taking $4.2 million from the city s $11.3 million rainy-day fund. Mr. Ford also proposed laying off 60 employees and furloughing others for 10 days to save $4.5 million. The mayor did not detail which jobs would be cut, but said that police, fire, and refuse collection would be left untouched.

Taking $4.2 million would leave about $7 million in the rainy-day account.

Mr. Ford said the economic conditions facing Toledo this year justify dipping into the fund. But he said taking too much from the fund would imperil the ratings assigned by bond agencies in Chicago and New York that affect the interest rate the city pays when it borrows money.

“If we would go in and take the additional $7 million to make the easy cut, they would look at that and definitely drop our rating,” Mr. Ford said.

The city s Standard & Poor bond rating remained at an “A” this year, but without the “positive outlook” tag given in 2001 and 2002.

Mr. Ford said his planned layoffs would not include police, fire, and refuse collectors, leaving 400 employees vulnerable to the cut.

However, the mayor doesn t have the power to order job cuts in Toledo Municipal Court or the clerk of courts office, which account for more than 100 general-fund jobs.

He said a little over half of the laid-off employees would probably land jobs in non-general fund departments, such as the Department of Public Utilities, which is funded by user fees. He said the utilities department has 60 or 70 vacancies that have been held vacant to absorb layoffs from other departments.

The mayor said he would ask his own staff to accept a 10-day furlough, which will mean coming to work, but not getting paid. He said he would try to convince the city s bargaining units to agree to furloughs as well.

Council members received the printed budget document yesterday for the first time. Council is required to pass a balanced budget by March 31.

Mr. Kapszukiewicz declined to say whether he would dip deeper into the rainy day fund than the mayor.

“City council has had less than one day to react to this budget document. The mayor and his staff have had weeks,” Mr. Kapszukiewicz said. “I think we are getting close to the point where services to the citizens may suffer.”

Councilman Bob McCloskey questioned whether the city would be able to hire its usual summer contingent of seasonal workers.

“I m a little concerned how we re going to maintain our grass, our parks, and our pools,” Mr. McCloskey.

Other cities are facing similar, or worse, budget problems:

w Columbus Mayor Michael Coleman, a native of Toledo, on Thursday recommended eliminating 72 vacant positions and laying off 88 employees to save $7.5 million. He proposed in a message to Columbus s city council taking $14 million from the city s $18.4 million rainy day fund, leaving just $4 million.

w Pittsburgh Mayor Tom Murphy on Nov. 10 appealed to the state of Pennsylvania for designation as a financially distressed municipality. After cutting 731 jobs in August, the mayor last week unveiled a $398.6 million budget for 2004 that includes a $42 million deficit. The distressed city designation could allow Pittsburgh to begin levying a wage tax on people who work in the city, but live outside the city limits.

w Cleveland s safety director last Thursday recommended eliminating 415 police, 235 firefighters, and 52 emergency medical technicians to get rid of a $52 million deficit. Mayor Jane Campbell said she hopes to hold those cutbacks to about 500 employees.

w The city of Detroit is operating on a $1.4 billion budget that was balanced on June 30 with 193 layoffs and the elimination of 658 vacant positions.