Another 'I told you so' on Toledo's budget

In 2008, I questioned the revenue assumptions of Mayor Carty Finkbeiner - especially the projected revenue from red-light cameras.

Item #3 from the list I sent to Finance Director John Sherburne (who never replied) was this:

3. You've doubled the number of speed cameras but the projected revenue from all those cameras is 6 times more than in 2007. Why isn't the revenue projection just double?

That was in March. By October, The Blade was reporting that the city was facing a $10 million budget shortfall for 2008:

Mr. Sherburne said the primary causes for the shortfall include:

•Income tax collections through September that were down $6.6 million.

•Overtime costs for city employees that are $2 million over projections.

•Revenue from red-light cameras that is $750,000 less than expected. (emphasis added)

•Fuel costs that are $1.5 million over budget.

But failing to learn their lessons in 2008, the city did the exact same thing in 2009. As I wrote in November 2008 (city-presented budget assumptions in bold, my comment follows):

• Red Light Camera revenue is provided for at $2.584 million for 2009. While this is the same as for 2008 it reflects an increase over actual collections for 2008.

So what makes the city think that it's going to have INCREASED collections from these cameras in 2009? Every study - even from the camera companies themselves - shows that income/revenue from the cameras decreases over time. So far, in 2008, red light/speed camera revenue is $750,000 less than expected. What evidence does the city present to document why they think they'll have 30% more income in this line item? Do they plan to add more of these cameras to get to that point? And what will happen if residents, like those in Cincinnati, pass a charter amendment to prohibit the cameras? These are the contingencies the city should think about and build into their budget projections.

Valid questions - in more ways than one - because on Friday 13ABC reported 2009 revenues from red-light cameras were were far from meeting projections.(hat-tip Lisa Renee at Glass City Jungle)

The mayor left out a very important number when writing up next year's budget. Toledo's red light cameras were projected to earn the city $2.5 million in paid fines in 2009. But in reality, that number is only $600,000.

The revenue dropped because the state forced Toledo to make the yellow lights longer by one second and Toledo increased the fine to $120-- too rich for some drivers who simply refused to pay.

Police chief Mike Navarre say unpaid fines cost Toledo $1 million. "It's a problem with photo enforcement. It's a problem with parking tickets. It's a problem with people that don't show up for court on traffic tickets."

Those unpaid fines go to collection, but Toledo is now adjusting next year's red light camera revenue at just $900,000.

Note the side comment about the state requiring the city to increase the yellow light time? Most traffic safety studies show that increasing the yellow light times and going to all red in all directions for a moment prior to the lights changing to green increases safety at intersections more than cameras do. And there was much speculation that yellow light times had been decreased at camera intersections in order to generate more money in fines. But that's another topic ...

This line item is currently $1.984 million short. They overestimated their revenue by 331%!

What's even scarier is that, even with two years of data, the city is still projecting an INCREASE in revenue from this source. If they've only collected $600,000 in 2009, what makes them think they'll collect $900,000 in 2010? That's a 50% increase!!!

Does anyone in their right mind really expect a 50% increase in ANY Toledo revenue line item?

Will City Council actually question this figure this time around? They failed to do so previously and we've got pretty much the same people asking the questions.

Perhaps Toledo's best hope for a realistic budget is our new mayor, Mike Bell, and the common sense approach he showed during the campaign. I hope he and his new administration will question these outrageous assumptions and give us a budget based in reality - rather than wished-for revenues to cover the spending they just can't seem to cut.

UPDATED! Carty is right - again

UPDATE: Toledo Finance Director John Sherburne has issued a letter to city council regarding the debt proposal. The letter is below Carty's at the bottom of this post.

Original post:

I know, I know - it doesn't happen often, but when it does, we need to acknowledge it.

Yesterday, Toledo Mayor Carty Finkbeiner sent a letter to City Council objecting to the transfer of Capital Improvement Plan (CIP) funds into the general fund to pay for interest on the loan taken out to purchase garbage trucks and cans. (The letter is below.)

I explained yesterday how council had no plan for meeting the obligation they were making and paying for the debt they approved for this purchase, but I did not address the fact of the ballot measure - which is how we got the available funds in the first place.

Hoping to get voter approval to take money out of CIP to pay for police and fire, the council 'set-aside' roughly $3.9 million and did not allocate it any capital improvements. They put the question to the voters as Toledo Issue 1 and called it the 'Safety First' plan.

But the voters said no - and it wasn't even close (54% to 46%).

Carty's letter rightly points out that voters don't want money diverted from the CIP to cover general fund expenditures - and that's what Councilman Joe McNamara's plan for the garbage truck payment would do.

As Carty states, the voters didn't want the city to move those funds around - even for such critical services as police and fire. So why would council even remotely consider moving the money for garbage trucks?

"We are elected by the citizens and work for the citizens. In case of a city-wide vote initiative, Council and the Mayor should respect the voters decision.
...
I am uncomfortable, at the very least, in going against the will of the voters who spoke to us on September 15."

And he's right. The citizens have instructed their employees on council that CIP funds are not to be transferred - and council needs to follow those instructions.

However, knowing this council, I'm afraid they'll think they know better and will vote to use those CIP funds. This would allow them to avoid making the difficult decisions of cutting government spending. And when given an easy versus a hard choice, they'll take the easy way out.

Just remember, five of these people are up for election. If you expect to have better decisions on city council, you MUST vote for people who don't embrace these perspectives.

Here is the mayor's letter - you can click on it for a larger image:



Letter from John Sherburne to Toledo City Council raising concerns about the city's debt limit, the identified plan for payment of the loan for the garbage trucks and cans and a 'reality check' for the claim that McNamara's plan will somehow help the 2009 deficit - you can click on it for a larger image: