Thursday, July 02, 2009

Will police concessions be enough?

The City of Toledo and the Toledo Police Patrolman's Association have reached a tentative contract and the TPPA has voted to approve it. Toledo City Council will vote today.

There were concessions by the union - many were not insignificant. They include no pay increases in 2009 and 2010, but a 3.5% raise in 2011; members paying 7% of their pension from July-December; paying a portion of their health insurance costs; and overtime payments being postponed until March 2010.

While these are probably good compromises, there are still problems for the citizens in terms of the long-term issues of unsustainable government costs.

I'm glad the TPPA will be paying 7% of their 10% pension contribution, since right now they pay nothing with the city (taxpayers) picking up the city's share as well as the employee's share (total of 29.5%). But having the union members make a portion of their own payment for six months does not address the problem that these pension pick-ups are unsustainable, and grossly out of whack with what the private market in Toledo is doing. Additionally, they 'traded' that concession for 6.5 more vacation days to be used over the same time frame.

The best part of the arrangement is that new officers will be required to pay their 10% pension share. Perhaps this is the start of addressing the problem, which exists in all of city government. If so, this is a good thing. However, if this is just a temporary step for the existing employees, we will find ourselves right back in the same mess for each upcoming yearly budget.

The same goes for the overtime. The city is not saving any money, just postponing when it will be paid. In effect, we're incurring costs we cannot now afford with the hope that the money will be available next year. Nothing in the economy or in the decisions about spending being made by the administration and council indicate that our situation in 2010 will be any different than now. In fact, because they've put off maintenance-type actions and removed money from the Capital Improvements Budget to balance the General Fund, we'll eventually find ourselves without the money for our capital needs as well.

Then there is the issue of the trash tax. Included in the tentative agreement is a little clause that says it is in the interest of both the union and the administration that the council address the deficit through revenue enhancements. In an interview with WSPD this morning (podcast will be here when posted), TPPA President Dan Wagner said the union agrees the budget must be balanced with either cuts in spending or additional revenue.

This contract does not solve the city's budget deficit. Neither will similar concessions by other unions who still haven't agreed on new contracts. So the administration is still insisting upon an increase in the trash tax (the equivalent of a 3.91 mill levy) and eliminating the payroll income tax reciprocity for Toledoans who work outside the city, both of which have been rejected by city council.

Stay tuned...


Tim Higgins said...


I agree that trading pers payments for days off is no way to deal with a part of the city's contract with the police. I doubt that there will be much of a savings to the city when overtime is added in to cover all of the additional days off.

The contract does push a good deal of the long term problem onto the next Administration however, something that Carty must be beginning to believe that he will not be a part of.

DeeDee Liedel said...

I'm not sure I understand the clause where overtime is not paid out until next year. Under accrual basis of accounting (which I believe all cities are supposed to be using), expenses are recorded when incurred (earned by employees), not when paid.

So delaying the payment of overtime does nothing to fix their budget deficit because the OT earned by officers this year will still be reported as an expense this year. Even saying they can take comp time instead of OT pay I don't think changes this issue.

Did they have someone from the accounting/finance department sit in on negotiations?

Maggie Thurber said...

DeeDee - the expense will be incurred on the financial statements, but deferred, I believe, much like sick time is accrued and reported.

Who knows if anyone from the finance department sat in???

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