Wednesday, May 06, 2009

City using restricted funds to cover everyday expenses

An article in today's paper says the city of Toledo "has been using money from restricted water, sewer, and other accounts to pay police and fire salaries and general fund bills to stay afloat during its current financial crisis," and that Mayor Carty Finkbeiner acknowledged this fact Tuesday.

This is illegal.

Here's what the Ohio Revised Code has to say about such funds (emphasis added):

743.06 Proceeds from water works to be a separate fund.
Money collected for water-works purposes shall be deposited weekly with the treasurer of the municipal corporation, and shall be kept as a separate and distinct fund. When appropriated by the legislative authority of the municipal corporation, such money shall be subject to the order of the director of public service. The director shall sign all orders drawn on the treasurer of the municipal corporation against such fund.

743.05 Disposition of surplus funds.
After payment of the expenses of conducting and managing the water works, any surplus of a municipal corporation may be applied to the repairs, enlargement, or extension of the works or of the reservoirs, the payment of the interest of any loan made for their construction, or for the creation of a sinking fund for the liquidation of the debt. In those municipal corporations in which water works and sewerage systems are conducted as a single unit, under one operating management, a sum not to exceed ten per cent of the gross revenue of the water works for the preceding year may be taken from any surplus remaining after all of the preceding purposes have been cared for and may be used for the payment of the cost of maintenance, operation, and repair of the sewerage system and sewage pumping, treatment, and disposal works and for the enlargement or replacement thereof. Each year a sum equal to five per cent of the gross revenue of the preceding year shall be first retained from paid surplus as a reserve for waterworks purposes.

The amount authorized to be levied and assessed for waterworks purposes shall be applied by the legislative authority to the creation of the sinking find for payment of any indebtedness incurred for the construction and extension of water works and for no other purposes; provided, where such municipal corporation does not operate or maintain a water works or a sewage pumping, treatment, and disposal works, any or all such surplus may be transferred to the general fund of the municipal corporation in the manner provided for in sections 5705.15 and 5705.16 of the Revised Code.

743.08 Investigation by legislative authority.
The legislative authority of a municipal corporation in which water works are situated or are in the process of construction may appoint a committee for the investigation of all books and papers, and all matters pertaining to the management of the water works, at least once a year, and more often, if necessary by reason of the neglect of duty or malfeasance on the part of any officer of such water works. Any such officer found by the committee to be so offending shall be liable to removal from office by the legislative authority.

Let the fireworks begin!


Jay Ott said...

The misuse of funds here raises the question of the likely possibility that this "malfeasance" has been done elsewhere.

If that's the case, then isn't trying to solve a "crisis" by creating another "crisis" self-defeating, not only from a logical standpoint, but also from a practical one?

By continuing along this path, I don't see the city of Toledo ever recovering unless the State of Ohio intervenes in some way.

navyvet said... I thought they were just incompetent.

Now, illegality enters the picture? How long has this been going on?

Next...investigation....prosecution...conviction....sentencing...jail time.

C Irmen said...

For how long has this activity been going? And why did no one directly involved in this obvious illegal scenario blow the whistle?? Are our Toledo city employees that ignorant of the law under which they are expected to serve? This is disturbing on many levels.

Timothy W Higgins said...


I find it interesting that our Mayor could say this, having previously admitting that he doesn't know how bills get paid in the city.

That being said, we are now faced with a serious dilemma. Should the mayor be removed for incompetence (as alledged by TBT) or because of criminal act?

And inevitably we must ask:
- Who knew?
- What did they know?
- When did they know it?

Hooda Thunkit (Dave Zawodny) said...


But, but, but "duh mayer" says that they were borrowing the money and they were going to pay it back; he swears they were going to pay it back. . .

And, since the money comes from more that just the City of Toledo, doesn't make those involved in the "borrowing" guilty in any/all other municipalities why buy water and/or sewer service from Toledo, making the "borrowing" more of a regional crime???

I would guess, Why, YES it does.

Then, can another jurisdiction bring charges against the perps?

Just something that makes me go, "Hmmm..."


navyvet said...

Even brain dead Toledo government educated citizens/sheeple should know that restricted funds are like pledged funds...

Pledged funds cannot be used while pledged.

Restricted funds can ONLY be used for restricted purposes.

Mary Taylor....where are you?

Casmi said...

Must be why I just opened a $775 water bill for a 2 bedroom house there in the Point. (Yes - actual figure. Not exaggerated.)

Perhaps they should invest some of that money into an online system that actually provides a response to the consumer. I emailed Public Utilities about this matter over a week ago and have never gotten to much as a drop dead from them.

Illegal? Of course! How long has this been going on? Longer than Carty will admit. And Jack Ford too.

Shock and awe.

Hooda Thunkit (Dave Zawodny) said...


Then you must be a snowbird.

The reports that I'm getting indicate that the DPU routinely sends out artificially high/outlandish bills when they encounter an unexpectedly low reading.

They (off the record, of course) say that it is designed to generate a call from the homeowner so that they can confirm/deny/reread the inside meter..., and then they will "adjust" the bill.

Snowbirds have told me that they have to do this each Spring, even though their water records consistently show the same pattern year after year.

Just imagine if you had automatic payment made from your banking account. . .

Grand larceny is perhaps too kind of a word for this whole process when they could easily check your payment history and NOT allow this to happen.

Considering recent disclosures re: the water/sewer monies, I think that somebody had better fix this before it goes through yet another billing cycle. . .

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