Agenda Review March 9 – Let the Exigency begin…
Copeland, Craig, Martinez, McNamara, Sarantou, Steel, Webb, Waniewski, Collins, Ashford, Brown present when the meeting began at the March 9, Toledo City Council Agenda Review. The first nine items were all related to exigent circumstances, Steve Herwat was present for the administration. One would be needed for each item, the administration requested they go into executive session to discuss items 2 through nine since they were related to union contracts.
This would allow the City of Toledo to stop paying any of the employee share of pension and would increase their health care premiums.
Amend TMC Ch. 2101(Exempt Group),eliminate pension pick-up & increase monthly healthcare prem.
Amend TMC Ch. 2105(Local 2058 ), declaring exigent circumstances,pension p/up & healthcare prem.
Amend TMC Ch. 2109 (TPCOA), declaring exigent circumstances,pension p/up & healthcare premium
Amend TMC Ch. 2113 (TFCA), declaring exigent circumstances, pension p/up & healthcare premium
Amend TMC Ch. 2115(Comm Op), declaring exigent circumstances, pension p/up & healthcare prem.
Amend TMC Ch. 2117 (Local 7), declaring exigent circumstances,pension p/up & healthcare premium
Amend TMC Ch. 2121 (Local 20),declaring exigent circumstances,pension p/up & healthcare premium
Amend TMC Ch. 2125 (Local 92),declaring exigent circumstances,pension p/up & healthcare premium
Amend TMC Ch. 2129 (TPPA), declaring exigent circumstances, pension p/up & healthcare premium
Brown wanted first reading. Collins wanted to address the bargaining units that were there, he’s not a lawyer but he feels 4117.08 applies:
(A) All matters pertaining to wages, hours, or terms and other conditions of employment and the continuation, modification, or deletion of an existing provision of a collective bargaining agreement are subject to collective bargaining between the public employer and the exclusive representative, except as otherwise specified in this section and division (E) of section 4117.03 of the Revised Code.
Collins said he was fairly certain that if Council passes this and the administration goes forward with it, the unions would seek a temporary injunction in the Lucas County Common Pleas Court and he thinks that the court would declare this to be an unfair labor practice. McNamara raised a point of order as to going into legal matters in open Council. Loukx stated that Collins clearly stated he was not a lawyer and he should be given latitude on this. McNamara apologized, Collins resumed. Collins said it would then go to SERB which could take over 8 months and if the bargaining units win, what will your victory mean? Your victory will mean that this City will no longer be governed under the terms and conditions which it currently exists, it will be taken over by the State and if you think that is good, look at what happened to Cleveland, it took 7 years to get it back. Your victory will be a city we will all lose control over, it will be a shallow victory. The laws in 1983 were created by the General Assembly, what would prevent the General Assembly from looking at 4117 and repealing. Anyone in public sector employment in a bargaining unit would lose. His advice is that the bargaining units should all discuss this and help find a way out of the fiscal morass we are in. There is no money, he challenges them to find it. He pleaded with them, to either all save our city together or we will lose our city collectively.
Waniewski wanted to know how many employees would be involved in the exempt group and how much savings would come from just that group. Herwat said he needed a moment to look that up, pension pick up assuming a start date of April 1st, $147,240.00 and the medical would be $93783 that’s just for the exempt, if you add to that the executive exempt, commissioners, manager, directors, etc. that’s another $123,536 for the pension and $77,700 roughly for medical.
Amend TMC Sec. 963.03(b) to increase monthly Refuse Collection Fee to $15.00 per month
Collins asked if his amendment was prepared, it was not. Collins said the cost of the containers is $60.00 a piece and that includes shipping, the chip, etc. His amendment would call for a charge of $5.00 a month for 24 months, that would cover the cost and would provide them within three years but will let them cash out the nine million dollar bond and save three million in interest. He also wants to keep the program of zero for those who do recycle and $10.00 a month for those who do not. He believes this would raise 9 million dollars on an annual basis.
Webb wanted to raise the issue of the last council meeting for a referral as to what cost savings could be generated by going to a bi-weekly schedule. The answer from Dave Welch was essentially we pick up a million pounds a day and that if they picked up 2 million pounds a day the net result was increased overtime costs. There was a quote in the administration in the paper that they were looking at that. Bell said he took the advice from Dave Welch, and he told them the same thing he told Webb, that it would not be feasible. Webb said one of the advantages is this going into an enterprise fund, we would then have a self supporting refuse collection division. Has the administration given any consideration into making trash collection be an assessed charge. That would move refuse completely from the general fund. Granted there are questions with Lucas County, but she thinks that merit consideration. Bell said they can find out what the legal issues are with that. Herwat said one other issue in going to bi-weekly pickup is the size of the refuse container, they could have to purchase more refuse containers or swapping them out. Webb said at all of the meetings she was at, the can was the recommended one, few of those she knows is filling up the cans, she’s more interested in the assessed fund.
McNamara the analysis of Webb’s suggestion would be different given the automated system. It takes the same amount of time with the automated can no matter the weight. Recycling is now an option, so the analysis from the 1980’s would not play out. Are people completely filling up their cans is an issue. He had some questions for Collins, as to clarification – $10.00 for those who do not recycle plus the $5.00 can charge, zero for those who do recycle for a trash fee but $5.00 for the can charge. McNamara said he has not seen the language, there is no money to be saved for deferring the cost of the cans this year, they’ve already made that payment, so if you wrote your language that it would go to the general fund it would reduce the deficit. Collins said this is part of the bridge, he did intend to write it so that it went into the general fund.
Collins referenced the previous cost out information, he said he shared this idea and several others to the administration as to cost cutting ideas that were not found to have value. Bell said it’s not a matter of the ideas not having value it’s a matter of making it work by March 31, but trying to make it fit by March 31 is the difficulty. Collins said he did not disagree with him, he asked if Bell had any dealings with the early retirement program. They then disagreed with the number of those who took advantage of it. Collins said all he is asking him to do is have an expert come in, he found one that would come in and set the whole program up for $7,500, he took the liberty of negotiating the price. Brown interjected something that was not audible but that stopped the discussion.
Steel wanted to know if the administration had considered anything like the recycling incentive program that was discussed earlier. Herwat says they looked at it but there are costs associated with that. They are open to any and all combinations that will create that same type of revenue or cost offset.
Brown said she had a referral but she’d make hers with McNamara. McNamara said on the early retirement program, the consultants from UT were hired by council, if he feels this is important he should create legislation for council to hire the consultant. Like anything else, seven votes we can hire the consultant and decide if it is feasible. Collins said he appreciates the suggestion but his problem with it is this consultant can not do anything without the cooperation of the administration, including the departments. If the administration is not willing to do this, he’s not sure he’d see the cooperation and then the end product is not going to be there. Bell said he would offer his help in any way he can. Collins asked, “Will you pay for it?” Bell said, “No – he’s already told you were you could get the money.” McNamara interjected that he still had the floor and we decide what the City spends money on so if you can convince 7 members than you can hire the consultant. When it comes to the city not cooperating, we’ve never used our subpoena power, but I think we have it, and could use it to force it to happen. Bell said if that’s what council decides to do that, they aren’t going to fight them, would he spend $7,500 on this right now? No, but if you take a vote and that is the way you want to go, we’ll help you any way we can.
Herwat said Collins proposal would make sense if payments could be spread out over several years, right now they happen at the time the retirement takes place. At this point they don’t believe it will save them money this year, they are dealing with a 48 million dollar problem in 2010.
Brown wants a referral on the containers, as to when the law as to when the containers can be brought out is still in effect, she thinks some people leave them out as a statement. She wanted first reading on the trash change.
Amend TMC Ch. 1905 to reduce tax credit from 100% to zero through 2012
Herwat said this has a sunset clause of December 31, 2012. Brown said no comments? First reading.
Ludeman asked if there had been any discussion with any of the surrounding jurisdiction to see if this could be negotiated. Herwat said no they have not. Ludeman said the Mayor and Council members are very high on regional cooperations, that may be an interesting way of approaching that.
Copeland had a question on the garbage cans, he wanted to know if a car comes and the can is on the curb and a car parks in front of it is there anything they can do? Herwat said if they are not able to pick up the can they leave a flyer stating why. He’s been out and in the areas of the city the automation works well where people follow the rules as to parking. They can not tow a car that is blocking a can, Copeland asked if it could get to that, because people are saying cars are being parked there. Herwat said he’d talk to Welch about that issue. Bell said in some City’s you can’t park in certain areas, it’s a matter of what is user friendly for our public, it’s how far you want to go with it.
Amend TMC by enacting Ch. 1915 to levy an Admissions Tax
Brown said that Lucas County Commissioner President Pete Gerken had a statement with a legal opinion on this. She wanted him to speak then to hear from the Cities Lawyers on it.
After Gerken offered pleasantries, and said the county would help in any way they could in relation to trash, he said he had asked for a ruling from the Lucas County Prosecutor’s office to help them in their deliberations on the admissions tax, who is their attorney of record for a response not on the policy side of it but from a legal and statutory position as to what the County’s position should be on this. Gerken told Bell and Brown, he felt it would be fair, open and transparent, to quote Collins’ he’s not an attorney, this is from Lance Keefer and it is no longer confidential with him sharing it, they feel and will go to court that County facilities are exempt and not covered by this, he cites a Cleveland court case on it. They do not think the city has the authority or a statute that would authorize the City to collect it. They basically don’t think it could apply to any of the Arena events, the Convention Center or Fifth Field.
Loukx said he did not write an opinion, they are looking at a 1965 case, it was a public golf course, the Supreme Court did say that, the question here is whether the Walleye or the Mud Hens are political entities and it’s clear they are not. Miami University had objected to be charged for a University function on University grounds,the opinion agreed with that but stated if it had been a student sponsored event it could have been taxed, the county may own it, but a private subdivision is having an event that does not hold the same impact and they believe that if this went to court the City would prevail.
Ludeman wanted to know how the City came up with the 8%. Herwat said they looked at a variety of ordinances around the area, 8% is the amount the City of Cleveland uses. Ludeman said that tickets are exempt from sales tax? Herwat said he does not know that, they will get that answer. Ludeman thought it was his understanding they were, Herwat said he does not know if there is a prohibition or if the code is silent. Ludeman said the ordinance references Cleveland and Cincinnati having similar taxes, Loukx said they have talked to Cleveland since there’s is modeled more after theirs, they tax anything that moves. Ludeman said Cincinnati used tax dollars to build their facilities, he said he is not throwing support one way or the other. He’s not sure if Cleveland or Cincinnati has 8% it’s appropriate for us.
Steel had a document that he got from the state department of taxation web site that goes into that from what they call admission taxes, in general admissions are not subject to sales tax which is one of the justifications for an admission tax, there are 66 municipalities in the State of Ohio that levy an admissions tax, including villages, the range is 3 to 8%, we would be at the high end.
Webb said she received a number of emails on this and was surprised at the number of people who have strong opinions on this. She spoke with Brown on this and she had agreed to have a Committee meeting on this, probably a Committee of the Whole, Webb asked for a similar memo from Loukx on the City’s legal opinion. The race track and the speedway are in her district, they are low dollar entry, she’s wondering through the zoning codes entertainment codes in our district, if they had considered tying that into this legislation and could encapsulate just the entertainment districts. She said the Symphony is very concerned, she said losing the Symphony would be catastrophic. Brown said first reading.
I’ll finish the rest later today…
I have to disagree with the admissions tax and the tax credit reduction. The admissions tax discourages people from attending events and the tax credit reduction strongly encourages people to move out of town. We should not have been doing pension pick ups in the first place. City employees should also be paying a higher percentage of their healthcare. Almost everyone has to contribute to their health insurance and retirement, and city workers should be no different. If the city was smart they would eliminate pensions and put the workers on 401k’s.
March 10th, 2010 at 9:31 amhave they done a comparison chart on the nine groups (1 exempt, 8 bargaining units)? i understand that some currently pick up a portion of their PERS and contribute to their medical – did any unit wind up on a multi-tier system? i would like to see the current standing of each unit and the potential savings based on the number of employees each unit has. i assume all groups will get the same deal coming out of this; if there are differences there will be hell to pay among the different groups.
are they able to address staffing requirements portions of the fire and police contracts under this exigency? how about years of service or double dipping?
don’t mean to foist this research on you lisa but if you have quick easy links or answers i thought i would enquire? thanks.
i would still like to see the city get the salary component of the compensation corrected coming out of this. advanced degree professional staff should frankly be our best paid employees – right now they are not. i understand that fire and police should get some extra for the hazaards of their work but right now the large number of command employees for fire and police also earn huge salaries.
March 10th, 2010 at 10:15 am#1 Patrick – City employees had their pensions picked up over multiple contracts in lieu of raises. Had they taken the raises instead, the city would be in a much bigger hole right now because they would be paying overtime on the raises, which they don’t do on the pension pickups. It’s not like they got both, and they city got off cheap when they did this instead. Now that they are broke, they are blaming the unions like they stole something they shouldn’t have.
March 10th, 2010 at 12:53 pmnot blaming unions – i blame the politicians and the arbitrators – but the employees are the beneficiaries. fair or not these financial problems need to be addressed. the system has to be flexible enough to handle systemic problems. in times of real income decreases (salaries are lower, benefits are lower – the wal-mart effect) and high unemployment we the public, we the taxpayers, can not afford to continue to pay our government employees as if nothing has shifted in the economy.
if we see the numbers on how raises would have affected the budget versus the pension pickup and lack of medical contributions then we could compare those numbers. otherwise i think it is conjecture but in either case circumstances require that we are able to adjust to what we can afford, what is appropriate, what makes sense.
March 10th, 2010 at 1:36 pmkc – I think you are wrong on the pension pickup not costing Toledo more when OT is worked. As far as I know, state pensions (PERS, STRS, Police & Fire, etc.) are based on a % of wages, no matter how those wages are paid (comp, straight time, vacation, sick or OT). You get paid Y, % times Y gets put in to the pension program. So if the pension pickup costs Toledo 10% of wages, and this was in place of a 10% raise, there is no difference whether that money is going to the pension fund or the worker, it is still 10%.
Now, I will say, that the pension pickup may affect the city’s expenses with regard to other items which are based on wages paid: workers comp, unemployment (those two may be self-insured, so it may not be a factor), medicare portion of FICA (which I think government workers still pay in to.) Those are the three payroll-based expenses that a company typical runs in to in addition to wages. These may not have been affected because they are not based on pension payments, but on gross wages, so an increase in wages would cost more on these line items, whereas an increase in pension payments would not.
Now, the place that there was a ’savings’ when the city started picking up the pensions is that future raises were not based on the pensions. For example, if in year 1 there was a 10% raise, and in year 2 another 10%, then in year 3 another 10%, the total increase over three years is actually 33% not 30%. With the pension pickup, that 10% is not added to the base wages for inclusion in future raises, so that the 10% pension, then two years of 10% raises would equal a total of 31%, thus saving 2% (note, my figures are rounded and not reality, for ease of understanding; when you are dealing with $100+ million in payroll, 1 or 2% can really add to the bottom line).
March 10th, 2010 at 2:01 pmPrivate companies do not give raises when they are hurting. The city is hurting and should not be giving raises or pension pick ups. Being a city employee does not entitle you to get everything for free. Why should taxpayers give city employees a better situation than they themselves have? Local union leaders should accept these concessions. If the city goes into receivership then the city employees will get a much worse deal than what the city is currently offering.
March 10th, 2010 at 2:50 pmDeeDee – you are right – all wages are subject to pensions and benefits no matter how those wages are earned. Also I am perplexed about the entertainment tax – entertainment comes out of excess income and the tax is really pennies on a dollar. This city is in financial crisis and we have to face up to this and fix the problem.
March 10th, 2010 at 5:30 pmDee Dee, you are correct, but you are also stating that there are still savings and that was all I meant. Thanks for the specifics though. And again, I will say these were negotiated years ago in lieu of raises, not last year. I have stated in many other posts that I don’t disagree with concessions, but by opening a contract that was just fairly settled six months ago, it is like opening up a can of worms. Say the unions agree to concessions again, and nine months from now when the city has financial problems again, they ask again. Should they just keep giving things up until there is nothing left? What if they give into the concessions and the city still decides to lay off? It is called a contract for a reason – they are agreed upon terms, and the city didn’t have to agree upon them. Every time there is a financial problem from here on out because of reckless spending, the city will now have the precedent to ask the unions for more or else…. It’s a very slippery slope.
March 10th, 2010 at 8:35 pmCan the same thing not be said about the city and tax payers? When the 3/4 percent renewal came up they said they needed it for safety, though they immmediately cut saftey. They ask for conecessions from union yet for the citizens of Toledo they just tack on a new fee.
It is also not a good precedent to set… Were spending more than we can afford, add a fee on the tax payer.
Of course the difference between the two precedents is that going to the tax payer is an increase in revenue while asking for union concessions goes directly after the overspending as a cost cutting measure.
March 11th, 2010 at 7:29 amWhen I took a pay cut at my work I was faced with a choice. Take it in stride or find a new job where I think I will get paid more. I took it in stride because I love where I work and I don’t think I’ll find another job right now that pays as well or treats me as well. All city employees have the same option laid before them. They can evaluate individually if they want to take there skills to another, more appreciative market. Or they can take it in stride.
I will say however that my employer did everything possible to cut costs before cutting pay and I would hope that is what Toledo is doing first too. That being said, however, personel are almost always the biggest cost.
March 11th, 2010 at 7:46 amWhen will government employees understand that the general population is having to deal with no raises, paying more into their retirement accts, and more for their health care. They cannot continue to have Cadillac benefits and 15 paid holidays when the common citizen doesn’t enjoy the same.
March 11th, 2010 at 11:04 amRaising a “ticket tax” is insane. Look at current consumer spending. People are not spending money, WHY? because they don’t have it, period!
soon the govt will have to impose the same kind of painful cuts upon it s dependent class – medicade,
March 14th, 2010 at 8:38 pmmedicare.
Now SS is calling in its IOU s