Glass City Jungle

The following are notes from the March 3, Human Resources, IT & Finance Toledo City Council meeting. One section of notes in reference to the ERP project is not included it will be a separate story later. The basic jist is the Administration for these departments wants to hire staff based on the premise they could collect more money from delinquent tax papers, contracts and businesses, to the point where they will send collection personnel to your home or business. After years of contracting out collection services, the plan is to now hire people to do these collections in house. This is not a complete transcript but it is typed from the audio.

Sarantou, Copeland, Collins, Ludeman, McNamara (Waniewski & Steel were also present they were not on the committee)

Human Resources

Peg Wallace said the main change is the reduction of one employee and moving another into another. They have no compensated absences and no overtime. They have no life insurance or worker’s comp budgeted since they were moved to another fund. They are looking at eliminating publication and outside printing.

They have $700.00 for parking expenses (That’s one parking spot). They are going to disconnect a few phones in HR that are not being used that will generate a small savings.

Professional and contractual services is for police class hiring, advertising is one that they are looking at eliminating and then departments would have to fund it from their own department.

Wallace said contractual services when they have to pay a court expert to review aspects of it and any outside person for police and fire promotionals. They have a total of 13 employees, 3 funded vacancies that are not filled. 2 senior employee relations and one is Wallace’s former position. 3 who of the employees that are listed are not full time employees. Board members/civil service commission.

Wallace gets a free parking space. The board members get $3,500 a year.

1310 line item Collins asked about. That was PERS pick up and employee share. He wanted to know what percentage of the employee pick up. Collins wanted to know what percentage it would be. Herwat thought it was 5% for the non executive and 8 percent for the administrator. Herwat said the exempt $147,207, executive exempt $123,536 is the aggregate total that includes the elimination of PERS as of July first.

Collins asked about the professional development line item, the employees get $450 per employee because 2058 negotiated that.

On 3741 he wanted to know if that was related to the affirmative action case. Collins wanted a more precise listing of that. The funds were specifically related to the Gonzales case. Collins wanted to know how many employees within the PERS system that were within one year of their 30 years and have reached their 30 years.

Collins said he wants this because Toledo should have an ERP and he said he will not be satisfied until they can prove to him its not cost effective. He said he can provide them a person that will contract for under $10,000 as to what the outcomes could be and this person did it for the whole state of Ohio. Herwat said he and Collins had discussed this before and to please forward the name of the individual to him. Collins said he would do so.

Waniewski had questions on 3741, he wanted clarification that was in relation to a lawsuit. Wallace said yes, Waniewski asked why that did not come out of the risk fund. It was stated this was for legal costs not liability. He wanted to know why there was more in 2009 when there was no police class. Wallace did not have an answer. Waniewski asked that as well as for the print shop – 2150 there was no class in 2009 and we are spending the same amount in 2010. He wants each department to take care in what they spend and is comparing them to what was spent in 2008.

Sarantou then asked about the printing fund and if there was no police class was that spent? Wallace did not know.

Sarantou then asked again about 3741, wanting to know why our law department did not do something, Wallace
said it was the plaintiff’s attorney’s not theirs.

Steel wanted to know why there was nothing in 2008 for storeroom then went up to 6,000. That was supposedly for pamphlets that would have been used.

Steel said there seems like there is a lot of questions as to where the money went last year related to the police class, he wants a breakdown of what exactly what was spent/budgeted for the police class. In 2006 there was a police class scheduled, 2004 there was a police class actually took place.

Steel asked about office supplies, Wallace said she asked Calvin Brown she’s not sure if they rent office equipment or not. Steel said that went up in 2009 and then stayed pretty much the same. Now it’s at $12,500 for copiers.

Steel understands the contractual services but he does not understand the high fluctuations.
Part of it is the numbers for 2009 are what was budgeted not expended and 2008 are expended.

Some of the costs were taken over by the police department now some that were in HR in the past.
Not all the expenses, with police and fire, but some was clarified.

Steel also asked about the lawsuit that Waniewski asked about, he agrees it should be checked to see if that can come from risk management.

Sarantou asked about ICT budget, it was said the SAP charges have been handled within the CIP fund and all other funds will pay for that, they are lookign for a way to spread that cost in 2011. Sarantou asked if they would be stable or would they increase. It was not known. Sarantou asked why the numbers were different in 2007 and 2008, Herwat said they can’t answer that that would be something IT could answer.

IT Budget was next…

Collins said he has a question on the shoe account. Wallace said Brown handles that, she will get the information for Collins.

Valerie Robertson, IT director.

She went through the pages of budget for that department and gave them a breakdown with a description of each line item and what they did to meet the 10% budget request.

Sarantou asked for a comparison to 2009 to 2010. Waniewski asked why there was no column for 2008. It was missed. Waniewski said that was the last time they had the real numbers. They had no numbers for 2008. Sarantou said they were going to need that. They decided to go on to the next section for Department of Finance while they were waiting. It was also pointed out that IT is not a part of the General Fund. Craig said some of their funding comes through the general fund. (Sarantou never stated when Craig arrived).

Finance Department – Patrick McLean – he was going to share some basic goals.

9.2 million dollars budget for Finance, 68 employees total, 58 are off of the general fund. Goals worth noting, make progress in the internal capacity to budget. Jane Boone is for all practical purposes the budget department of the City of Toledo. Their ability to analyze is reduced from cuts in the past.

The ERP is a goal and they want to expand their staff, they expect to expand purchasing, including collaboration. They are going to collaborate with HR as far as controls, it has been a struggle just to get the numbers where they have a good idea, but the HR director and he will meet twice a month so they are up to date on employee numbers. He intends to engage in a budget transparency process that they are able to provide the public with information, tools, so they can engage more completely. This budget is not the end it is the beginning. They want to look at longer range plans for budgeting and cost savings, he wants to explore a two year budget process as a long term goal. It would require a charter change, but Voinvoich has tried to do that on a federal level, and has not gotten anywhere, but he thinks it’s something to consider.

Maria Gorney – Accounts Division

They want to improve their report time, they were at one time 2 months behind, now they have caught up and are within the current month. They plan to continue and to increase reporting time. Due to the lack of staff reconciliations have not been completed on a timely manner, hiring and training is needed. Ross to SAP conversion is critical. They need more staff, basically they need at least four more people. She wants positions that were in this division in the past refilled, an Accountant, a Chief Accountant, an accounts payable control clerk and an accounts receivable clerk. She then wants three brand new positions, 3 administrative analysts to help them with the SAP master data control for grants and two other accounting related duties that would be exempt positions.

Comparison net to net, even requesting positions, they are only requesting an additional $51,000. She is asking for a total of 19 positions old and new, but they are not budgeting them for an entire year. Sarantou needed clarification on how many positions were being sought. She again said 4 old, 3 new.

Steel said the only reduction appears to be a severance amount reduced from 2009 to 2010.

She said that is correct that they will have lower severances since they only have one person retiring. Steel said that’s not a budget reduction. Steel said they would have to see some very significant improvement/benefit to justify that.

McLean said when they put together their budget they did it with two goals, collection of outstanding debts, and the implementation of the ERP which will not have tangible benefits. They can see later if they can scale back because of efficiencies. Craig wanted to know how much good would the 19 million be that they spent on the ERP without actual data being put in it doesn’t mean a lot. McLean said as they might not get the benefits, if they are not adequately staffed we could have a colossal debacle when it goes live.

Craig said it does not do you any good to buy a new dump truck and not put any fuel in it.

Sarantou wanted clarification on how many would be for ERP, the response was 5 for that 2 for accounts payable. They are trying to collect more, when they use a collection agency it’s most times over 30%. They felt it was worthwhile to collect receivables on their own. Utility charge backs, demolition, anything that a division creates an invoice for, the law department relies on a collection agency, they may be able to help the law department so that they can get more. There is 3 million dollars in the general fund that they could collect. Sarantou said if it is such a great system would we not need less people? She said no, this sytem is very data heavy and a faster system does not help when it comes to reconcilation. The system will provide faster reporting, but reconciliations still need to be done.

Collins asked about the receivables, she said 3 million in current that are able to be collected, this has nothing to do with income tax, clean ups, fire inspections, Collins asked about the deficit in fire inspection fees. He said he was confused in the reports in relation to fire inspection fees.

Collins asked about parking spaces, there are none in Finance. No one has a parking spot that Finance pays for. Herwat said there are a number of parking spaces that are provided as a part of the lease payment. Council pays for three out of their budget that are above that. There are 24 in delinquent income tax, Collins said we have over 27 million total. Collins wanted to know how they thought they could bring in so much in accounts receivables compared to income tax collections.

Then it needed to be clarified, that the 3 million included income tax and receivables, .53 on other accounts receivable. It was asked how many were in the STACKS unit, they have 8.

One person brings in $450,000 to $400,000 if they are seasoned. They have 4 seasoned employees in the STACKS unit.

Waniewski wanted to know about the demolished homes, if it is a general fund such as a fire related one, the general fund would be the fund impacted. They had many fire demolitions that invoices are still being prepared for.

Waniewski asked about some of the line items that are now coming out of the risk management fund. Line item 1410. The risk management officer was in their department but now he is in the law department. Those line items belong to that position.

Wanieswki said he’s trying to do apples to apples but he’s finding a fruit salad.

Wanieski asked if the contractual charges were accurate since some were coming out of the general fund and then risk management. It should be one or the other. It was stated the expenditures come from which fund they they were generated from. In the 2010 budget, 3741 has gone from $700,000 to over one million. A red flag comes up in that category of what we are spending for contractual services, if the money is coming from other funds, that’s fine, but he knows what is in what bucket.

Herwat says he understands but it will take some time to get those answers. Gorney said the law department is working on that information. She should be getting that shortly.

Craig wanted to know the average age of their receivables, how many were over 90 days old, on the accounts receivable side. She did not know, they do not write off any receivables, there will be a lot of old stuff. Craig asked if they could run just those that are only a year or so older, we are not going to collect many that old, you want to hunt down the big ones, but you don’t want to spend that much time collecting a $200.00 bill that’s over a year old. ERP has an automatic dunning system. She thinks if we start reminding people and coming up with payment plans, they’ll have more. Craig said since they probably have not gotten one in four years.

Sarantou asked for clarification on the accounts receivable, Gorney said there is over 3 million dollars on the books that is owed, She does not think half a million is unrealistic.

Herwat said when he found out there was not an accounts receivable section he was shocked, that is why it’s a part of their financial plan to collect revenue. Sarantou said we had about 75 people in finance in 2001, this is the price we pay when we make cuts.

Ludeman said page 22 the medical insurance line item, he’s trying to grasp this. There is a $45,000 plus increase, does that included the amount? Herwat said many employees pay 25, 40 or 50 a month, you can not apply a straight 20% figure to come up with a saving. The numbers in the budget do not include this, the line items in the budget would go down.

Next the Budget section of the Finance department – Jane Boone

There are only two people, the budget director and the budget analyst. Alot of the analysis has gone by the wayside in preparing the budget. They are proposing bringing back two more budget analysts. They can beef up their system and analyze the budgets more and will let them begin to review budget activity annually and help the divisions do that and help clean up problems before they become a problem.

They also intend to reestablish the position control monitoring function, the budget office would meet monthly, b-weekly with the HR and administration. This would ensure they have a tighter control on the number of positions they have in the City of Toledo. They also want to reconcile all ordinances with what is in the financial system. They also want to create a new budget tool in the ERP program.

There were no questions about this.

Then Tax Division - Clarence Coleman

One of their goals is to increase inhouse collection by bringing on additional personnel, to go after some of the low hanging fruit, they were not able to go after that fruit because of the lack of bodies. They want to increase their court filings, the faster they go after these, the faster they can collect on delinquent tax payers. They also want to update their income tax code, it’s not current with the Ohio Revised Code.

The bottom line of the treasury/cash management budget has decreased by $47,000 because a person retired and they had a severance package for them. There were some increases that resulted in their budget for treasury being $52,000 less than 2009.

On the taxation side, the budget is increased in $218,000 due to the additional staff they intend to bring in.

Position controls, they have three positions in treasury they intend on hiring an intermediate account clerk, there are 19 employees in taxation, they plan on hiring a three collector/investigators, they want to fill a vacancy in the other two a total of three additional bodies to taxation for the year. A senior clerk position is also sought. They think there is a lot of paperwork that their STACKS and other unit are doing that a senior clerk could do. They have three of those that live outside of Toledo, then one in Toledo, then withholding.

Right now if you are an employer and you don’t do withholding first quarter it may take them two or three cycles before they discover it. If they have a person assigned to that, as soon as an employer misses the first quarter they’ll know it and they’ll be knocking on your door. They plan on going after delinquent businesses and tax payers making home and business visits when necessary as well as phone calls something they are not currently doing.

Sarantou said in summary the taxation department will increase their budget by $218,000 and how much more do they think they will bring in? It was stated 2.5 million is expected as an increase.

ERP was discussed next by McLean

This will be covered in it’s own post later.

No one else had a comment on that beyond Sarantou saying “next”.

McLean said he had personnel from purchasing, CIP, debt service and ERP if Council had any questions. Sarantou said they were fine on that at this point.

They moved back to Communications and IT –

They picked back up where they started on that with the numbers from 2008 being included by Valerie Robertson. Some of the cuts described as well as some of the reductions. Advertising was reduced, telephone was reduced because of the VOIP projects. She moved funds around based on the SAP system, they did not previously have codes for that, where they have identified the purpose of what that money was for to the accounts that they are supposed to be in. She also based her budget on the premise that no CIP would be given, so her budget is based on no CIP dollars.

Sarantou asked they plan to save $300,000 for the VOIP system? She said correct they have some savings they should have built in for that. The rest will be based on the number of phones they plan to convert.

On position control, she gave them copies of that, they have 14 funded positions with one vacancy. One position may also be moved over to ERP, they have 15, which would leave them with 13 with one funded vacancy they would like filled. She said the SAP project took more of her staff than she anticipated. They were initially thinking there would only be 100 or so work stations, that grew to over 244, that made her department have to play a more significant role in getting desktops upgraded, that’s pushed a lot of implementation or service calls back. They feel they need that position filled to help them with their work load.

There were no questions from Council…There were no questions from the audience.

Ludeman had one question for Herwat, on the Mayor’s plan, the proposal for $15 a household on refuse, this was to start April 1st, how many households is that based on, Herwat said 95,000. Ludeman said that doesn’t fit, it should be 12.825 million dollars for 95,000 households for nine months of the year. The figure that is in the proposal is 10.57 million.

Herwat said the reason for that is the revenue is there was a previous two million dollars included for the trash fee.