Saturday, January 31, 2009

Scare tactics and deflecting blame for city's budget woes

It was bound to happen - Toledo administrators telling us that they may have to cut police and fire in order to balance the budget.

It's not that we want to, but we have to consider it, we're told.

Of course - doom and gloom, fear and scare tactics. Layoffs of personnel across the board instead of elimination of departments and functions that are unnecessary. If we don't threaten police and fire, we won't get the public's support for whatever taxes we may choose to raise...blah, blah, blah.

But here's the scariest part of the commentary on the additional $8.1 million budget deficit (on top of the $8 million they already addressed) from Bob Reinbolt, Mayor Carty Finkbeiner's chief of staff:

"He said the city's $6.4 million rainy-day fund would be applied to the 2008 deficit. Because $2 million of that was earmarked for the 2009 general-fund budget, the 2009 plan would need to be revised with more cuts, inflated revenue assumptions, or anticipated savings.

But even using the entire rainy-day fund would leave the city's 2008 budget $1.7 million in the red."
(emphasis added)

I cannot believe they would even consider such a scheme, especially in times of increased unemployment, people leaving the city and business closings. What they're saying is that they may arbitrarily decide to just raise the estimated revenue in order to present a budget that is 'balanced' on paper.

Isn't that part of what got us into our current mess? I raised numerous challenges to the 2008 revenue estimates during the town hall meeting in my district, but despite a promise to 'get back to me,' none of my questions were answered. By June, revenue numbers were less than projected and it was evident the total budgeted income would never be achieved. Now we find our 2008 deficit is, currently, $16.1 million - with not enough reserves to fill the hole.

Similar questions have already been raised about the 2009 projected income - and the logic being considered by the people who lead this city is to just up those projections????

All that will do is put us in a worse condition at the end of this year, postponing the day of reckoning.

Toledo Councilman Joe McNamara is "shocked" over the lack of information to council. Well, I'm not on council and I could tell from the finance reports (public records distributed to council members in advance of finance committee meetings) that things were dire - all the way back in June. I also questioned why council would pass a 2009 budget without having the final numbers for 2008. Apparently, McNamara is a little slow on the uptake:

"Toledo Councilman Joe McNamara said it was deplorable that the mayor had kept council out of the loop. "I am utterly shocked the deficit is as bad as it is because this is something the administration should have told council as soon as they knew," he said. "It's a real crisis and … council should not have heard about it for the first time at a public meeting, and it would have perhaps affected some of the decisions made in the 2009 budget.""

Ya think?

To make matters worse, McNamara tries even harder to blame the mayor for his own lack of attention to the fiscal condition of the city:

"Mr. McNamara added, "It was unconscionable for the administration to allow council to pass the 2009 budget if they knew the 2008 deficit was so high.""

For the record, the administration doesn't 'allow' council to do anything when it comes to passage of legislation - but good try at deflecting blame, Joe.

Council must accept their responsibility in this fiscal debacle and they must be adamant in cutting spending - not by trying to placate everyone with across the board cuts, but by establishing priorities for mandated functions and eliminating non-mandated departments and tasks. I've talked with union leaders who say they're willing to make concessions because they understand the financial situation - but they have a hard time doing so when they see frivolous spending in other areas.

Carty could send a strong statement to everyone if he reduced his own office staff. Since 1993 when we had a city manager form of government, over 20 administrative staff have been added to the payroll. I cannot believe we need that many more people just because we switched to a strong-mayor form of government. Carty criticized 'patronage' hiring when he ran against former mayor Jack Ford. He should reduce his own staff and lead by example. If nothing else, it's a good start for finally bringing the city's expenditures in line with its actual (not hoped-for) revenue.

21 comments:

2Bn11FA said...

Maggie,
what happens if the city budget is not balanced?

Maggie Thurber said...

That's a good question. By law, the city has to balance the budget...

this may require some research...

Hooda Thunkit said...

Maggie,

"what happens if the city budget is not balanced?"

You just push the extra costs into the next year..., until you can't anymore.

Guess what?

It isn't working anymore...

I watched it for many years; that's why some companies won't do business with Toledo. slow to pay, sometimes for many months...

2Bn11FA said...

I was just wondering because Cleveland filed bankruptcy in the late 70's and they came back and are doing pretty well. It might be a benefit to Toledo/Lucas county for the city to file, get a new mayor & council and start over again.

M.J. said...

Is there truly anything we can do as citizens to get this city back on track? Due to this cities lack of fiscal responsibility, I currently find myself unemployed. I was one of many that were scheduled to begin the Dec. 1 police class. The city administration new we would be facing a budget deficit, but still proceeded to waste money having many people go through the process of employment. There were extensive background checks, physical evaluations and mental evaluations. These must have cost us thousands of dollars. Why go through all this when the administration new there was no way for a class to be had.
Shame on me, but I’m new to paying attentions to what the city is spending our tax dollars on. I like many took it for granted that the city was doing the right thing on behalf of the individuals they represent. I know find myself reading everything I can that relates to what the city is doing. I’m sickened by what I’m finding. What can we do to correct this?

Carol said...

Bob Reinbolt actual said "..., inflated revenue assumptions,..." and expects nobody to catch it?

In doing a little snooping I found this in the Ohio Administrative Code. I'm not sure if it applies to this situation or not, but it's interesting reading. http://codes.ohio.gov/oac/117-2-02

Many procedures, but I couldn't find a penalty for failure to remedy. I won't believe that there is no penalty for what I would deem to be a criminal mishandling of public monies. If you entrusted me with your money and I screwed it up as badly as the City of Toledo (administration and council) you could have my head handed to me in court and I would very likely face jail time.

But ... I'm still marveling at the brilliance of Mr. Reibolt stating "...inflated revenue assumptions..." And we all know what assume means ...

savant1955 said...

The Finance Director should have been monitoring collections throughout 2008. Why is this such a surprise? The revenue projections for 2009 should have been flat or more conservative to provide realistic numbers for the 2009 budget preparation.

savant1955 said...

The Finance Director should have been monitoring projection throughout 2008. He should have seen the downward trend in collections when preparing the 2009 Budget. The revenue projection for 2009 should have been very conservative. The City of Toledo needs to make some hard decisions and get it right,otherwise, the budget woes will continue and exacerbate.

Maggie Thurber said...

MJ - the 'solution' is for you, your family and like-minded friends to become activists - that means calling, emailing and showing up at council meetings (including committee meetings). It also means attending any neighborhood meetings council members have and asking them tough questions and then not letting them get away with poli-speak as an answer (which is a term I use for when a politician says a lot of words that don't answer your question and usually leave you scratching your head saying, "huh?")

It also means you support candidates for office who understand finances - but that also means determining whether or not a candidate has such a skill and that's hard work.

It means you work against elected officials who've not done the things you've wanted them do in terms of their votes and actions in office.

It's hard work to have a representative democracy, which is what we are...and most people don't want to work that hard - not because they don't care, but because they have so many other demands on their time. It's also because many people believe that their individual actions won't have an impact, so they put their efforts into other areas.

That you're now paying attention is terrific!!!!! You can now start sharing what you learn with your neighbors and friends and encourage them to take action as well...it doesn't take much if many people are doing something, because the burden of holding politicians accountable can be shared.

And I'm sorry about all the efforts that appear to have been wasted when it comes to the new police class. If we hadn't opened the pools last summer, we would have had the money to do the class. How's that for priorities?

Jeff said...

Its amazing, if I ran my household budget likt the city I would be in jail or at least in court every other week having judgements passed against me. There is just no accountability or integrity in government at any level. If I were a Toledo citizen I would vote for the best qualified non-incumbent on the ticket regardless of political affiliation. Let these bums know who's boss and if they don't get their acts together they will be fired

Darkseid said...

Hey, Sexy!! When are ya gonna run for Mayor and save us?? ;^)

Black Swamp Road Geek said...

Sell the Parking Muni parking garages to a national operator.

Transfer the balance (millions) in the account to the general fund.

Maggie Thurber said...

Darkseid - um...NO!

But thanks anyway...

:)

Maggie Thurber said...

BSRG - but if we sell the garages, then the city loses the yearly income...and then they'd have to cut some spending somewhere...

At least - that's how many of them think inside that ivory tower...

Tim Higgins said...

Maggie,

You have called this one out for some time, and as a consequence, anyone who claims to be surprised is fooling no one but themselves.

The city budget has become a work of complete fiction for the last few years, and a poor one at that. It is one with little plot, more than a few villains, and close to 300,000 victims. It is edited by an absentee landlord and printed by a bankrupt publishing house. (Yes all of the classics of serial melodrama are here.)

Yet there are solutions, as you have likewise pointed out. Remove departments with responsibilities not covered by the city charter. Cut back administrative budgets, as has been previously suggested. Remove funding from pools, markets (as in Erie St), and museums. If you want to sell real estate, don't sell the parking garages (as BSRG) suggested, but by all means put the ESM, the Portside building (that we rent to COSI for $1 per year, remember), and The Docks.

While we are at it, perhaps we can do without some of the City Council positions. If we are to be ill-served by a group who cannot seem to properly monitor the budget, one of the few responsibilities that they have, then perhaps we can be ill-served by less. Better still, perhaps we can be well-served by new faces, new names, and new ideas in Council.

As for the Mayor, "Take Back Toledo" says it all.

Mad Jack said...

From Maggie Thurber:It's hard work to have a representative democracy, which is what we are...and most people don't want to work that hard

True enough. Others don't have the time or energy (as you pointed out) and of those that are willing to put some work into the political process, many get burned out because they don't see any results from their efforts. In other words, if I campaign vigorously for or against some policy that the government is following and I can't discern if I'm winning or losing, I'll quickly get discouraged and go home.

That's what Carty and the Toledo city council is hoping for.

Most elected officials keep an informal list of what they call the 'usual suspects'. These are people that attend meetings scheduled at odd hours during the day and ask complex embarrassing questions during a meeting. Their objections and comments are usually ignored because the officials know they aren't connected to some special interest group with money and votes.

Two things that I'm wondering about are: How much impact the geographically local blogosphere has on politics and political decisions; and Two, if the smarter, more well informed people tend not to join special interest groups or consciously become part of a political movement.

It seems to me that the Toledo government gets away with a lot due to apathy.

Black Swamp Road Geek said...

If I recall the garage account has more than $10,000,000 in cash. If you are operating them you need it for renovations and maintenance, if not you can turn the money over to the general fund. Even a one time transfer of half that money would be helpful.

Selling the garages is a marketable asset that you should be able to sell quickly. Some of the others would take much longer and hardly garner anything significant. You have to give to get a return.

Similar to the tow lot and the ambulance service the garages are a service that the private folks can do.

Maggie Thurber said...

BSRG - I agree (and hope you understood my previous comment on the garages was what council would say...)

:)

Black Swamp Road Geek said...

From 2009 budget
79-PARKING GARAGES
Estimated ending equity 2008 15,799,996.76
2009 estimated revenues 1,445,245.00
2009 estimated expenses 1,183,865.24
Estimated ending equity 2009 16,061,376.52
86-MUNICIPAL GARAGE
Estimated ending equity 2008 11,933,550.04
2009 estimated revenues 13,070,554.41
2009 estimated expenses 13,003,235.57
Estimated ending equity 2009 12,000,868.87

$28 million in cash sitting in parking garages

Brian said...

The Finance Director can not give accurate, timely information to city council because they don't have it. As Betty Schultz has pointed out on numerous occasions, the city's finance information is four months old when it is compiled. One has to assume that they are still using abaci and slide rules to make calculations.

In some defense of Joe McNamara, he must rely on the finance department to get information. If they won't provide it, Joe would have to "sue" the city to get it. That would be huge and might be a remedy. It would also put a spotlight on how difficult it is to get information from the Finkbeiner administration.

Maggie Thurber said...

Brian - while the finance information may not be a timely as we'd all like, finance data is distributed at each Finance Committee Meeting - and those handouts are available to all council members whether or not they sit on that committee.

I was able to get them and could tell in August that the June figures were no where near 50% of the projected estimates. As the year went on, the numbers presented each month clearly showed that the revenue was NOT meeting projections and wouldn't be able to be close to the totals expected. It was also plainly evident that expenditures in various line items were way over budget.

If I could tell before the end of the summer that the city was in dire financial circumstances, city council members should have been able to tell as well.

Additionally, they have the ability to ask tough questions at those finance committee meetings - though they rarely do.

This problem cannot be laid at the feet of the administration alone. Council is as much to blame - maybe even more so because they hold the purse strings.

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