Rainy day fund dried up in 2009
I’m not really sure why WTVG is reporting this as a budget update since the money for the rainy day fund was used up and I thought everyone knew there was nothing left, no magic rabbit to pull out of the hat, but Toledo budget update: no rainy day fund is a recommended read because it tells us how much the anticipated deficit is, and what might be coming:
City council president Joe McNamara says, “When you dip into the rainy day fund, it shows you don’t have stability in the budget.” That hurts the city’s bond rating, which means higher interest rates on money the city borrows.
But Toledo can still balance its budget without a rainy day fund by saving millions using an automated trash system, combining certain city and county services, and hiring more firefighters to cut down on overtime and more auditors to collect back taxes.
Councilman George Sarantou even suggests across-the-board cuts in city government. He said, “Let every department have a cut of, say, 5 to 10 percent to get us through this crisis.”
I can’t understand how the city would save money by hiring more firefighters. One of the reasons any company uses overtime is because it saves money. Rather than hire additional employees (and paying them benefits) you use the employees you already have to the max. When you hire additional employees you have to allow vacation time, sick leave, paid health insurance, and eventually retirement. Hiring additional firefighters will not save the city money, but actually cost us much more after the first year or two (or perhaps even in the first year if benefits for additional firemen outweigh the cost of overtime to the employees we now have).
December 2nd, 2009 at 11:05 pmThis is not to say that I am against hiring additional firemen (especially if our forces are getting burned out), but I doubt it will save us money in the long run. I have to wonder how such an increase measures against Sarantou’s suggestion that we cut the fire department 5-10% to get us through this crisis. Maybe we could just declare certain areas of town non-habitable, and let them burn down.
December 2nd, 2009 at 11:14 pmWe can’t cut the fire department though, which is what creates the overtime number and the belief that money would be saved with more firemen. There is a minimum manning requirement as a part of their union contract so the only way to change that would be to reopen the contract and negotiate that change, which has not been successful in the past.
December 2nd, 2009 at 11:16 pmI was looking at the Blade article about Mike Collins belief that hiring additional firemen would cut costs, “If he would have hired those 40 people in December of last year, fire overtime would have been less than a million,” he said. “The cost of salaries for them would have been about $2.1 million and overtime would have been less than $1 million, so there still would have been a savings of about $1.5 million.”
I have to wonder if Collins is being disingenuous since he talks about the firemen’s salaries, but makes no mention of the costs of their benefits. Such a “public servant” makes me nervous.
December 2nd, 2009 at 11:28 pmIt’s not just Collins, it’s been discussed in Council meetings more than once, and they tried earlier this year to pass a resolution to hire more firefighters, one example of the media at the time:
The idea is to cut back on fire department overtime costs. In 2007, Toledo fire’s overtime hit $1.8 million. In 2008, overtime jumped to $3.8 million. This year’s estimates are as high as $4.2 million.
The 11 firefighters who would be hired have firefighting experience. They would only need three weeks of training, as opposed to the usual months-long process in August.
“If we hire them in August, they would basically cost northing because, in 2009, the reduction in overtime cost would pay their salaries,” said City Council President Joe McNamara. “But in 2010, we’d save approximately $1 million.”
December 3rd, 2009 at 12:13 amThere is generally a point where overtime becomes more expensive than hiring a new person because of the time and half and it tends to be close to where overtime hours = regular work hours.
Now if they were paying like a day’s worth of overtime, probably not worth it, but this seems like many days worth of overtime a pay period.
December 3rd, 2009 at 9:32 amWhen you consider vacation time, and potential sick leave usage, the real increase in numbers is closer to 37-38 because two or three will be used to cover vacation time and sick leave. The ratio could even be like 36:4 (actual manpower increase/reliefs for vacation and sick leave).
December 3rd, 2009 at 10:20 amDon’t forget– we’re not talking about the typical eight hours of OT here. FF’s work on a 24-hour on, 48-hour off basis. So if a FF’s on OT, that cost is for 24 hours to meet that minimum manning requirement. It adds up quickly.
That is why during the campaign, I recommended the management agreement between Toledo parks & rec and the Metroparks to save on park maintenance, which the savings could be used to hire the new fire class, and actually cut the budget by a few million dollars long-term.
I had warned then that despite 2009’s $27 million dollar deficit, if we didn’t take a long-term view on the budget, we’d be right back in the same situation again and again– and here we are already.
December 3rd, 2009 at 10:43 amThe time is right to continue the planning for merging city and county departments. This has been very successful in many other areas of the country.
December 4th, 2009 at 12:36 am