The union contract 'savings' that aren't

On Thursday, the City of Toledo issued a press release 'documenting' the savings from the tentative contract agreement with the Toledo Police Patrolman's Association:


















As you can see from the chart, the PERS pension roll back is only for six months and only 7% of the 10% employee portion. Any new employees will pay their full portion of 10%, as the chart shows. This also means that the city is counting on hiring new police officers in 2010. If the city does not put on a class after recalling the remaining laid off police, there are no savings in that category.

The co-pay on the insurance is a good move and it looks as if that is included as a provision for all three years. But the elimination of the stipends and tuition reimbursements is only for 2009, which means these will be a continuing cost in future years.

Then there is the overtime deferral, with employees being eligible to use comp time instead. While it's listed as a savings in 2009 and 2010, there is no way the city can know this figure. The administration cannot predict how many patrol officers will choose the time versus the pay or some combination thereof. And it really doesn't matter because general accounting practices require the city to calculate the obligation on the books. The agreement calls for any overtime not converted into comp time to be paid out in March 2010, leaving the expense for the next mayor to deal with in next year's budget.

And there are no guarantees that next year's budget won't be as bad as this year's.

So the real savings in 2009 is only $1,605,785. Technically they're 'saving' more when you add in what they don't have to pay for the overtime, but since that money has to be paid out eventually, it's not a 'savings'.

And the real savings in 2010 turns out to be no savings at all. When you add the cost of the deferred overtime payments of $878,000 to the claimed savings of $774,000, you get a negative $104,000.

This contract's actual savings are about $1.5 million in 2009. And that's good for the '09 budget. But the agreement will actually cost us $104,000 in 2010 and even more in 2011 when the wages are scheduled to go up 3.5% (which also means that overtime and pension costs, because they are calculated upon the wage, will go up).

While we've dodged one of the small bullets aimed at us in 2009, we've done nothing about the cannon balls still coming in from this contract, and others, in the future.

I hope members of council recognize this prior to voting on the agreement tomorrow.