Fallacies surrounding the 'privatization' of Toledo trash service

Let's get this perfectly clear - Toledo is not 'privatizing' its trash service even if it decides to go with a contract with the county which would contract with a private company to do the collection.

True privatization would not have government involved at all.

The local paper's take on the matter, which actually supports the proposal currently before council, is that the city 'subsidizes' the trash service:

"Most Toledo residents who recycle pay the city $8.50 a month to collect their refuse. Senior households that are eligible for homestead-exemption discounts pay $5 a month. These fees do not cover the $16.5 million annual cost of trash collection; the city pays about $7.5 million a year to subsidize the service.

That expense has become harder to bear during the recession. It has required the city to shift money to its general fund from its capital budget, restricting the city's ability to fix streets and make long-term infrastructure improvements."

First, all tax dollars go to support city services and the trash tax referenced goes into the general fund - not a fund dedicated to paying just for the service. This means the trash 'fee' is actually a 'tax' to be used for anything council decides and not just for the collection of garbage.

Second, our 'temporary' (since the 1980s) 3/4% payroll income tax was supposed to be going to provide this service. Now, in addition to our taxes and our fee, the city still needs more money - not just for trash - but overall. If council had eliminated spending in other areas, it would have the money for this 'service' which many believe is a proper function of government.

Lastly, the editorial board seems to think that council had 'no other option' but to steal from the Capital Improvements Fund in order to meet it's annually general fund operational expenses. Nothing could be further than the truth. Council could have made tough choices in the past to STOP SPENDING, but that's not what they did.

My take on such things is that if you can look in the Yellow Pages and find companies who do a function, there is no need for government to do it as well. But if we're going to 'privatize' our trash, why don't we just go all the way instead of contracting with another governmental entity (Lucas County), which will then assign it to a different governmental entity (the Lucas County Solid Waste District) which will then issue a contract for a private company to do the work?

In the suburban communities, the property owner contracts for the services directly and it seems to work just fine. Despite the naysayers who want to claim that *some* Toledo residents aren't responsible enough to do this kind of thing on their own, I believe that it could work as well inside the city limits as it does elsewhere.

After all, if going with a private supplier is *good*, wouldn't eliminating all the middle men be even *better*???

The problem isn't our trash service or even how much it's costing. The problem is the overall costs of government relative to the amount of revenue they receive. Government spends more than it takes in, and Toledo is no exception, as our years of deficits clearly demonstrate.

No matter what plan the Council goes with, we will still be paying - one way or the other. Don't get me wrong - we should, each of us, pay for our garbage service. But if I'm going to pay, why don't I get to choose how I will do so, with the ability to not pay government if I opt for a private supplier who will give me a fee based upon my usage of the service?

Sadly, that's using logic and reason and we don't seem to do that here. Instead, the thinking that got us into this position in the first place will continue to permeate our area - until there's no one left.

Trash Tax advisory

Statement from Karen Shanahan from today's press conference:

Citizen’s Advisory regarding Refuse fee lawsuit and class action.
May 24, 2010

There are two issues regarding the refuse fee and this Citizen’s Advisory is an alert to all residents of Toledo who pay the fee. It is to address the request for class action, which was denied once, but will be heard again by the Common Pleas Court. Would you want to be included if the “fee” is determined to be illegal?

Let me start with some numbers:

• $28,000,000 – revenue received or projected from the Trash Tax in 3.5 years

• 100,000 –approximate number of residences being bill quarterly for the Trash tax.

• 122 – number or residents identified who protested the fee to the Department of Public Utilities.

• 50 – number of protest letters the City can find.

• 1 – number of persons included at this point by Common Pleas Court in the class action.

Let’s say a robber robbed a bank and got away to ½ a million dollars. As he flees the scene, a local citizen stops the thief who is then arrested and the money is recovered. Now the citizen had a checking account with the bank with $500 in it, and the courts tell him, you get your money back because you caught the thief, but the other 5000 investors whose money was stolen… they don’t get their money back because they didn’t catch the thief, in fact, the thief gets to keep the rest money.

Preposterous, ridiculous, you say!

Well, it’s happening with the request for class action in this lawsuit.

The original decision by the court was that only those who file a formal protest could be included.
In essence we did that on behalf of everyone when we filed the lawsuit 2 years ago. It was to serve as the official protest against the tax and read as follows (CASE: G-4801-CI-200802348-000):

1. This class action seeks … compensatory damages, …. a preliminary and permanent injunction, …. for unjust enrichment due to Defendant’s wrongful taxation of Plaintiff and Plaintiff’s class by administratively approving an additional tax to collect refuse without the approval of Toledo City Council and without the approval of voters by referendum as this is a tax on property owners.

8. On information and belief, Plaintiffs’ class includes over 100,000 housing units, but this class is limited only to those who pay this tax.

9. This action is properly maintained as a class action because in all pertinent aspects the Plaintiff and all other similarly situated individuals have predominately identical claims.

10. This tax is not completely identical for all members of the Plaintiffs’ class because some individuals own multiple unit apartment buildings, and some individuals receive a discount for recycling.

11. Each member of the Plaintiffs’ class is required to pay this tax or face the following penalties by the city: (1) terminate water service; (2) forward the account to an outside collection agency; (3) transfer the delinquency to any other property owned by the account holder; (4) bring an action at law for collection; (5) or place a lien on the property.

What constitutes class action? As defined by © 1999 Timothy E. Eble: Standards For Class Certification Under the Ohio Rules of Civil Procedure: A Concise Summary

• Ohio Rule of Civil Procedure 23(a) contains five explicit requirements that must each be satisfied when seeking class certification.
• First, the plaintiff must establish that an identifiable class actually exists
• Second, the named representatives must be members of that class
• Thereafter, the plaintiff must demonstrate:

a) the class is so numerous that joinder of all members is impracticable;
b) there are questions of law or fact common to the class;
c) the claims or defenses of the representative parties are typical of the claims or defenses of the class;
d) the representative parties will fairly and adequately protect the interests of the class;
e) Common questions predominate over questions effecting only individual members; and, that a class action is superior to other available methods of resolving the claims.

The City has already demonstrated they are unable to record and maintain protests submitted by concerned residents. When I asked for copies of protests received in an open records request, they sent 54 protests letters; of those 9 matched emails received stating a protest was filed; however, there were no letters for an additional 68 protesters who notified us they had filed.

One must conclude it is obvious that class action is necessary to ensure everyone is included according to point

a): the class is so numerous that joinder of all members is impracticable

If the City cannot account for 68 protest letters we know exist, how many more were submitted that just disappeared? How would the city manage 100,000 protests?

We residents of Toledo must stand up and make our will known, class action is essential to ensure the city does not profit from this illegal tax. They must be held accountable.

As the thief who robs a bank, we would never allow him to keep his booty, so likewise we must demand the same decision for a government who blatantly disregarded the Ohio Revised Code when it legislated this tax.

I suggest further that every resident of Ohio should watch the case and brace themselves if the courts do not rule in favor of residents of Toledo, for as Toledo goes, so likewise will other desperate governments of Ohio as this is easy revenue with no limits.

Take action now, quickly and with conviction as the Courts are soon to rule on class action. I suggest you call the Common Pleas Court and ask that every resident be included in the class action.

Common Pleas Phone # is: 419-213-4484
CASE: G -4801 -CI -200802348-000

For questions contact:
Scott Ciolek, Attorney, 419-491-7270

For information:
Shanahanselect.blogspot.com

City 'misplaced' trash tax protest letters

This in via email:

Karen Shanahan will present a Citizen's Advisory regarding the Refuse Fee and Class Action representation regarding the Fee. A call to action by the residents of Toledo.

When: Monday 10:15 a.m.
Where: In front of One Government Center

Karen has been keeping us updated on this issue on her blog where her last post detailed the request for public records on how many people filed a protest against the trash tax. I know that I've filed the protest form she provided with every one of my water payments since the form was introduced.

But apparently, the city "has "misplaced" most of the protest letters," according to a comment Karen left on my earlier post "Trash tax and broken promises: we told you so!"

How convenient for the city - they just happen to 'misplace' all the letters that could be used against them in a lawsuit.

Thankfully, I kept a copy of the letter I sent, but I wonder how many other people thought about doing so?

If you can, please come out to support Karen and help fight the this illegal tax.

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:

Toledo government's 'loss' is taxpayers' gain

Toledo Mayor Carty Finkbeiner is at it again with a 'letter' to both mayoral candidates and Toledo City Council, chastising them for not 'raising revenues' for the city. (see bottom of post for the three-page letter)

He again cites his proposed increase in the trash tax and the elimination of reciprocity for payroll income taxes paid to other jurisdictions as 'revenue' the city should be collecting.

But the perversion of thought that passes for logic in Toledo politics is most evident in this statement from the letter:

"Our refuse fee is one of the lowest in Michigan and Ohio - $8.50 per month if you don't re-cycle (stet) and $1.00 per month if you do. We lost $8.4 million this year because it is so low."(emphasis added)

I'll skip over the whole point that our payroll taxes are supposed to pay for this service and the 'refuse fee' is over and above those payments. I'll also skip over his hyphenation of the word 'recycle' - and even the mention of Michigan prior to Ohio.

Let's look at the perspective Carty has with his claim that "we lost $8.4 million." Just who is the 'we'? He clearly means the city bureaucracy because he certainly isn't referring to the taxpayers.

And he considers the lack of imposition of additional taxation a 'loss.' Now, that may be true in terms of the government. However, he fails to see the reality of the situation in that failure to pass this additional tax meant the residents of Toledo 'saved' $8.4 million. Those who would have been taxed actually kept all that money to themselves.

And what happened to that money? Well, we spent it - on items we needed like food, mortgages, utilities, college educations or even amenities that helped our local economy. Or perhaps we saved the money, putting it into a bank account and providing a resource for a longer-term goal - or even assets upon which the bank could base lending to others.

This is a really terrific thing for the taxpayers and for our local economy. Rather than turning over the money to government, we kept it and used it for our own purposes.

Carty, instead of complaining that the city 'lost' something it had no right to, should be advertising how much 'extra' residents of this city had as a result of the failure to implement an additional tax.

But Carty, the local paper and the members of council who support this taxation see only one side of the coin: additional money from us that they don't have to play with.

And they conveniently fail to address the 'what if' when it comes to the trash tax: what if they lose a lawsuit over whether or not their so-called fee is, indeed, a tax and implemented illegally? If they lose that case, they'll have to repay what they've collected to date. Where will that money come from and how much more in debt will the city be then? Well, let's not even think of that, they must be saying to themselves.

Toledoans are fed up with the way this government is spending our money - continuing to fund studies and non-essentials while cutting police and other required services. They say there's no where else to cut, but we obviously don't believe them because we see them spending money on such frivolousness as life insurance coverage for themselves and other non-mandatory items they justify with the 'it's only' logic.

But the bigger problem in all this is the perverted reasoning and perspective that permeates the halls of One Government Center: that forcibly taking more of your money (at any time, but especially in a down economy) is somehow 'good' for you, while the opposite - you keeping your own money - is somehow a 'loss' for government and a really terrible thing for the city.

We have an election on November 3rd. Do we have the courage to elect people who believe that government's 'loss' is, indeed, the taxpayers' gain?

Or will we just elect the same old names and philosophies that got us into this mess in the first place?

The letter:

No increase in trash tax

Yes, I still call it a trash tax because that's exactly what it is. It is a 'fee' that is supposedly charged to 'encourage us to recycle' and penalize us if we don't. However, it's collected and deposited into the general fund of the City of Toledo and goes to pay for the daily operations of the city - not exclusively to fund the garbage service.

And there is still a lawsuit over this very issue, which makes for interesting reading. The city claimed it wasn't a tax and it was implemented properly, but when the suit asked for class-action status, the city claimed it was a tax so class-action wasn't allowable.

I know - but this is Toledo.

An increase in the tax has been on the table for a while now, pushed by Mayor Carty Finkbeiner as a way to balance the budget which is still facing an $8 million deficit.

According to the ordinance that was on council's agenda last night:

City Council enacted Ordinance No. 91-08 amending the refuse collection fees for three years beginning May 1, 2008. The legislation provided for yearly decreases in the rates paid by citizens who committed to recycling to encourage an increased level of recycling in the city. In May 2009, the recycling rate dropped to $1.00 per month and beginning in May 2010, the rate will be $0.00. Recycling levels have now increased to fifty percent and continue to rise due to greater environmental awareness and the pilot automation project that has been rolled out in parts of the city. For these reasons, there is no longer a need to reduce the rates to encourage recycling. In addition, it is necessary to provide an increase in both the non-recycling and the recycling rates to recover a greater percentage of refuse and recycling collection costs. This ordinance amends the current monthly refuse collection fees from $8.50 non-recycling and $1.00 recycling to $10.00 non-recycling and $7.00 recycling and authorizes the establishment of a recycling rewards program to begin January 1, 2010 with the new automated refuse collection system.

How convenient for the city that they no longer need to encourage recycling because of the participation. But isn't that always the case with these types of programs? They implement a 'revenue source' based upon penalizing a type of behavior. Then, when the behavior modifies and the revenue declines, they need to expand to meet the budgeted amounts. They do this with red-light and speed cameras and now with the trash tax. The real solution, however, is for the city to reduce spending and live within their (actually OUR) means - not forever attempt to increase the means, but that's another matter entirely.

Of course, this proposal would have really stuck it to the people who recycle. As I've previously pointed out, passage of this ordinance would have meant an 18% fee increase for people who don't recycle, but a 600% increase for those who do. It was the equivalent of a 3.91 mill levy, more than we pay in total for the two permanent improvement levies for Toledo Public Schools - or about what we pay for the Port Authority levy, 911 levy, Senior Services levy, MetroParks land levy, and the COSI levy COMBINED.

It also would have included some sort of bribe in the form of 'coupons' for local businesses - as if that would somehow make $120 per year more palatable. Yeah - right!

Council President Joe McNamara wanted to delay the vote on this issue because Councilman Frank Szollosi was not present. Thankfully, Councilman D. Michael Collins (also a candidate for mayor) objected and called for the vote.

Tom Waniewski, Lindsay Webb, Mike Ashford, Collins, Mike Craig and Betty Shultz voted no. Wilma Brown, Phil Copeland, McNamara, George Sarantou and Steve Steel voted yes.

So the ordinance failed.

Surprisingly, Republican George Sarantou who is also up for election this year, voted yes to raise 'taxes' on Toledoans. Webb, who made a campaign promise not to vote to increase the fees, has consistently voted against such proposals and should be commended for keeping her promise to her district.

The still unanswered question, however, revolves around the lawsuit. If Karen Shanahan and her attorneys prevail and this becomes a class-action, and the city then loses the case, the monies collected may have to be returned, in addition to eliminating that source of revenue to the city. As far as I can tell, no one in the administration nor on council has addressed what happens then.

But not to worry...I'm sure they'll come up with some other 'revenue enhancement' scheme if that's the case.

Groceries for garbage-or let me bribe you into liking higher taxes

The City of Toledo has, for about a year now, been considering Mayor Carty Finkbeiner's request to increase the trash tax (recycling fee as they like to call it, as if that name makes it sounds better). Under the proposal, people who don't recycle with their garbage will be charged $10/month and those who do recycle will be charged $7/month.

Currently, those who don't recycle are charged $8.50, so the increase is 18%. If you are already 'helping the city save the planet and their landfill,' you're paying $1/month, so your increase is 600%. So why are the people who've been supportive of recycling being penalized by a larger increase than those who don't bother to sort out their paper, plastic and cans?

But here's something to think about when they tell you 'it's only...'

At $10 per month, that's $120 per year - the equivalent of a 3.91 mill levy. At $7 per month, it's $84 per year - the equivalent of of 2.74 mill levy.

(A 1-mill levy raises about $30.62 per year when applied to a home valued at $100,000. Of course, as this is not a percentage but a flat fee, the costs are disproportionally higher for lower valued properties.)

That's more than we pay in total for the two permanent improvement levies for Toledo Public Schools - or about what we pay for the Port Authority levy, 911 levy, Senior Services levy, MetroParks land levy, and the COSI levy COMBINED.

If the City of Toledo asked you to approve a 2- or 3-mill levy, how would you vote? But if they call it a refuse fee (even though it is clearly a general revenue tax) and add it to your water bill, perhaps you don't realize just how much of a tax it really is.

And now, to further obfuscate what's really going on, they want to bribe you with coupons.

You see, if you're getting coupons, you won't mind the tax.

Councilmen Joe McNamara and Steven Steel think offering coupons makes the tax 'more palatable' because the coupons are worth more than the increase. And then it's an 'incentive' ... but I thought the lower tax if you recycled was the incentive. And I'll tell you, $1/month versus $8.50/month is a nice 'incentive.'

Under the program offered by RecycleBank, you get points based upon the weight of the amount of recyclables (currently 2.5 points for each pound collected) which can be redeemed when you order rewards.

From their website:

"We track this weight with the help of a Radio Frequency IDentification (RFID) chip embedded into your family’s recycling cart. This RFID chip is connected to your individual account identification code.

Each week, when your recycling is collected, these “smart carts” complete with a chip are scanned and weighed right at your curb. The system records the weight, converts it to points, and credits that amount directly to your account. You can then redeem those points for discounts and rewards at hundreds of participating businesses."

RecycleBank gives some examples of the coupons: $2 off a purchase of $5 or more at one vendor or '1 free YoBaby Organic Yogurt' at another. A search of reward partners in multiple Toledo zip codes showed only three vendors: Golden Chopstick, Half Price Books and Olga's Kitchen.

Now, it's likely that if RecycleBank got the contract with the city, they'd find more reward partners in the area, but how many of them would you actually use?

And are coupons - which you can get in any number of locations from papers to internet - enough to get you to overlook the severity of the tax increase? Remember, this is the equivalent of a 2- or 3-mill levy!

But wait, there's more!

You don't have to wait for the city in order to participate in RecycleBank. You can create an account and start earning points right away! I did so, in order to get a better idea of exactly how the program works. They asked me all kinds of routine questions (name, address, phone, email) which I answered, and other details (like the number of people in my home, and whether or not I have kids or grandkids) which I didn't.

Upon registering, I earned 40 points - so I immediately went to the 'rewards' to see what I might be able to get:

* for 1225 points, I could get $10 off at AMC Entertainment (I'd have to generate 490 pounds of trash to accumulate that many points)
* for 100 points, I could get $10 off a purchase of $30 or more at Bed Bath & Beyond
* for 30 points, I could get $2 off any non-lip item from Burt's Bees (but those were temporarily out of stock)
* for 100 points, I could get $1 off any 1 package of Capri Sun
* for 40 points, I could get $4 off $20 purchase at CVS/pharmacy
* for 75 points, I could buy 2 get 2 cans of Mighty Dog (if I had a dog)
* for 70 points, I could get $7 off a $70 online purchase at Target.com

By far the most options for use of the points were to make donations to charitable organizations.

This is not a good deal. It would take most people 'tons' of garbage to earn the points to offset the increased tax.

AND IF I CAN PARTICIPATE IN THE PROGRAM WITHOUT WAITING FOR THE CITY, HOW DO THE COUPONS MAKE THE TAX INCREASE 'MORE PALATABLE'??????

Now, this doesn't even get to the point that the trash tax isn't even for the garbage collection - it's going directly into the general fund to be used to offset the general expenses of the city.

Of course, there's been no discussion of the lawsuit filed over this 'fee' either. What happens if the city loses the lawsuit and has to stop collecting the tax, or if they are ordered to return what they collected from all the people who have protested the issue? Then what?

City council members don't want you to think about those things. They'd rather distract you with the promise of coupons...

We're not that dumb.

How is this a good deal for taxpayers?

According to the Journal of the City of Toledo, when city council approved Ordinance 373-09 (beginning on page 8), the contract with the Toledo Police Patrolmen's Association (TPPA), it also agreed to the following:

Other provisions - Grievance Settlement.
The City agrees to pay $25,000 to the TPPA to withdraw any and all outstanding grievances filed prior to June 24, 2009 with the exception of grievances on employee parking, eliminating of the tax officer position, on call compensation/payment for fuel, sergeant-at-arms position, permanent shifts, and layoff grievances.

Tax Payment. A one-time payment will be made by April 15, 2010 based on the sliding income tax collection schedule as follows: if the 2009 audited books reflect an income tax collection greater than $148 million, the employee receives 2% of his/her base rate; if the 2009 audited books reflect an income tax collection greater than $150 million, the employee receives 4.5% of his/her base rate; if the 2009 audited books reflect an income tax collection greater than $152.5 million, the employee receives 7% of his base rate; if the 2009 audited books reflect an income tax collection greater than $155 million employee receives 9% of his base rate.

So, let's get this straight: the city is going to pay the union - not the members, but the organization - $25,000 to get them to drop a bunch of grievances? Since when did taxpayer money get to be used to buy off settlement of grievances - many of which the union never should have had to file in the first place?

And how much are we really saving if the city has to pay up to 9% (based upon income tax collections) in a lump sum? Police - and firefighters who have the same terms in their contract - are going to be financially rewarded if the city collects more than it estimated? Of course, there is the chance that the city doesn't collect more than it budgeted in income, but history indicates the unions have a safe bet on this one. However, a lump sum is just a one-time payment so there is no cumulative effect on the base wage.

How 'bout if the city, after balancing the expenses based upon the project income, REFUNDS any extra income to the taxpayers who paid it in the first place, rather than pay off the unions????

Oh - but the city hasn't yet balanced the 2009 budget. Even with the 'savings' from these contracts, the mayor is still estimating an $8 million budget deficit for the remainder of the year - with no source of extra funds to the cover the shortfall.

And if the administration's projections for next year are even remotely accurate, there is no money to pay for 2010 basic services, much less a lump sum for police and fire fighters.

Yet council approved both these contracts with no idea whatsoever of how they were going to pay for the terms they agreed to.

Are taxpayers just supposed to hope that the city doesn't collect more than the budgeted $145 million in income taxes so we don't have to pay out the lump sum? And if we don't get more than that, we still have an $8 million budget deficit to pay for, which is why Carty Finkbeiner is asking council to increase the trash tax and eliminate reciprocity for people who live in Toledo but work in another city.

What it boils down to is this: the city has no money, but if it collects more money than it budgeted, police and fire will get lump sum payments (of up to 9% depending), reducing the amount of 'extra' money that could be used cover the deficit.

And city council and the mayor think this is a good deal for taxpayers???? I think we got screwed...

Toledo deficit still at $8.6 million, mayor again calls for tax increases

This press release in via email (at 6:30 a.m.) from Mayor Carty Finkbeiner:

FOR IMMEDIATE RELEASE
Saturday, July 18 2009

Notice of 2009 Budget Deficit

Attached is a copy of a letter from Mayor Finkbeiner to City Council regarding the 2009 budget deficit. In the letter, Mayor Finkbeiner attached an analysis of savings for the tentative agreement with Local 92 and the expected cost savings with the TPCOA contract.

###

Putting the garbage tax into perspective

Toledo Mayor Carty Finkbeiner, as part of his solution for the budget deficit, wants to increase taxes.

Among other things, he has asked council to raise the monthly refuse fee (aka: garbage tax) from $7 to $10 for people who do not recycle and from $2 to $7 for those who do. He says this would raise about $1.6 million.

I have several concerns about this proposal - aside from the fact that raising taxes is rarely the best solution.

First, the administration has not addressed, at least publicly, how they arrived at the $1.6 million. Did they assume that all people who currently pay the $7 would continue to refuse to recycle, or did they estimate a percentage of people might begin to recycle in order to keep their monthly payment the same?

Second, the increases in costs for the two groups are not the same. The $5 increase for those who are recycling (and helping the city maximize and prolong the use of the landfill) is 250%. The $3 increase for those who don't recycle is only 43%.

Why the disparity? Is it because they think that people will revolt if asked to pay more than $10 per month for this tax?

Third, and perhaps the most important one, is understanding the true cost of the 'refuse fee.' How do we compare this unvoted tax in order to understand just how much we're really paying?

At $10 per month, it's $120 per year - the equivalent of a 3.91 mill levy. At $7 per month, it's $84 per year - the equivalent of of 2.74 mill levy.

(A 1-mill levy raises about $30.62 per year when applied to a home valued at $100,000. Of course, as this is not a percentage but a flat fee, the costs are disproportionally higher for lower valued properties.)

That's more than we pay in total for the two permanent improvement levies for Toledo Public Schools - or about what we pay for the Port Authority levy, 911 levy, Senior Services levy, MetroParks land levy, and the COSI levy COMBINED.

If the City of Toledo asked you to approve a 2- or 3-mill levy, how would you vote? But if they call it a refuse fee (even though it is clearly a general revenue tax) and add it to your water bill, perhaps you don't realize just how much of a tax it really is.

To protest your 'trash tax'

Attorney Scott Ciolek was my guest last night on Eye On Toledo with an update on the trash tax lawsuit. As we've previously learned, the city has continued to maintain that the amount charged for 'garbage and recycling' on your water bill is a 'fee.'

However, when Ciolek sought class-action status for the 'fee,' the city claimed that class-action wasn't applicable because the charge is a 'tax.'

The trial court has ruled that the suit does not qualify for class-action status and Ciolek has appealed that ruling to the Court of Appeals. The trial court will await a ruling on the the appeal of this point before going any further.

In the meantime, and to protect the rights individual property owners regarding the charge, he is suggesting that all who object to the tax include a notice of such objection with their water bill (or sent to the water department if you pay on-line).

If you'd like to record your objection with Ciolek, you can send your contact information and the date of your objection letter to him: trashtax@gmail.com

Here is the recommended language:

Date

Pursuant to the Ohio Revised Sec. 2723.03, I hereby notify the City of Toledo that I am paying the 'refuse fee' under protest. Whether construed as a 'tax,' 'fee,' or 'assessment,' the 'refuse fee' is unlawful for the following reasons:

1. The 'refuse fee' essentially functions as a property tax; and
2. The Ohio Constitution requires a referendum before such an assessment may be levied.

For the reasons stated above, I intend to sue under Revised Code Sec. 2723.01-2723.05 for the purpose of recovering this unlawful appropriation in its entirety.

Sincerely,

name
address

If you pay online, you can send your letter to:

Department of Public Utilities
420 Madison Ave. Suite 100
Toledo, OH 43667-0001

or to:

Mayor's Office
City of Toledo
1 Government Center, Suite 2200
Toledo, OH 43604

UPDATES: Toledo City Council approves new trash tax

Toledo City Council has rejected a continuation of the current $5.50 trash tax ($3.00 if you recycle) in favor of a sliding scale to bring the total to $10 if you don't recycle and $0 if you do.

This year, people who recycle would pay $2 and those who don't recycle would pay $7. Those amounts would go to $0 and $10 by 2010.

UPDATE: Vote was 8 to 4 ... all new rates go into effect May 1st:

2008: $7 for non-recyclers, $2 for recyclers
2009: $8.50 for non-recyclers, $1 for recyclers
2010: $10 for non-recyclers, $0 for recyclers

FOR the new fee structure: Mike Craig, D. Michael Collins, Joe McNamamra, George Sarantou, Betty Shultz, Mark Sobczak, Tom Waniewski, and Wilma Brown.

AGAINST the new fee structure: Phil Copeland, Frank Szollosi, Lindsay Webb, and Michael Ashford.

Kudos to Lindsay Webb who said during her campaign that she was against a trash fee in any form - and has voted accordingly.

UPDATE as of 8:54 p.m.: Motion to reduce the PERS pickups by 1% failed. Only McNamara, Szollosi and Webb voted to start the process of employees paying more of their own portion of their retirement contributions.

Council also voted to fund the LCIC at $25,000 and add $75,000 for economic development. Currently they are trying to follow how much money they've got to spend to see if they can start a police class in October.

They all look confused...they should have put the numbers up on a board in order to keep track of them because they've all got different figures on their papers and spent several minutes just figuring out how much money they do or don't have...

Trash Tax Lawsuit

Local attorney Kurt Wicklund, on behalf of Karen Shanahan, has filed a lawsuit in Lucas County Common Pleas Court asking for a permanent injunction against the 'trash tax' ... also referred to as the garbage fee.

I broke the story last night on Eye On Toledo and you can listen the podcast here (at the 6:45 p.m. mark).

As Karen explains, she believe the garbage fee is actually a tax - and an unvoted one at that. She's asking for both a temporary and permanent injunction, return of all monies collected and attorneys fees.

Of course, in today's paper, City of Toledo Law Director John Madigan calls this a political ploy.

"Initial review of the complaint leads to the conclusion that it is politically motivated and utterly devoid of merit," he said in the e-mail.

"The city will take appropriate action in response to this suit and is confident that it will prevail in any court proceedings."

I've talked to Karen about her position on this numerous times and consider myself to be a pretty shrewd judge of political actions. I don't think this is even remotely politically motivated. Karen believes this is wrong and that it was implemented illegally. She's worked extensively on this for several months, doing research on her own and then talking with numerous professionals about the issue and her questions. Karen raised questions that no one from the city answered - and now they'll have to ... in court.

Further, even Councilman Joe McNamara raised the issue of the legality of the 'fee.'

"Mr. McNamara said he has been fearful that a taxpayer would file a lawsuit, claiming the refuse fee was enacted illegally."

I'll keep you posted on the details of the court case as they evolve.

Hypocrisy over gas rate hike

Lucas County Commissioners Pete Gerken and Tina Skeldon Wozniak, along with Toledo City Councilman George Sarantou, are upset about the proposed increase for Columbia Gas, even though the rate plan hasn't yet been submitted to the PUCO.

The estimated increase for maintenance and capital projects is $68 per year - "an average jump of about $5.64 per month for customers starting as early as Nov. 1" according to The Blade article.

You can hear for yourself from this WSPD sound clip that Comm. Wozniak thinks this is too much and a huge impact on families.

Strangely enough, these three elected officials had no problem with the huge increase in property tax levies that were on the ballot last November. Had all the levies passed, the owner of a $100,000 home would have seen their taxes go up about $50. With the election outcome, the amount was about $45.

For an even closer example, the garbage tax that Toledo City Council imposed upon us last year is $5.50 per month - $66 per year.

I don't recall any outrage over that amount - or even any concern - about how this similar amount might impact families who are struggling. Where were the press conferences and the demands that the service providers (the city or the public agencies) reduce their costs prior to imposing higher fees? Where was the press conference saying these costs are just 'too high' for the families in the area? Where was the concern for businesses?

It was non-existent. And that's the problem.

When it comes to government or public agencies, these individuals have no problem with taking more of your money. And, unlike Columbia Gas, you have absolutely no control over what government charges you. At least with Columbia Gas you can reduce your usage by turning down your thermostat, better insulating your home, or switching to more energy efficient appliances, etc. Even if you voted against all the tax levies, only COSI failed and you're paying more whether you want to or not.

As for the garbage tax, you can't opt-out of participation in city pick up and you'd still have to pay the fee if you did. And the garbage tax was only supposed to be temporary (yeah - right!), but is included for another full year in the 2008 proposed budget. At least we got to vote on the levies - we were given no such option on the garbage tax.

The problem is the hypocrisy of the elected officials. You cannot pretend to be outraged over increased costs on one hand when you've either supported or failed to oppose similar increases in costs on the other. If you're truly concerned about rising costs for families in the county, you'd oppose ALL increases - and especially when they come from government.

Tax increase or government cuts?

Well, that's the choice and I think most would agree that Toledo's government hasn't done what it needs to do in terms of cost savings or cuts prior to talking about a tax increase in the guise of a 'trash fee' added onto our water bills.

What I find so frustrating in all of this is that Councilman Frank Szollosi (D-at large) is the one leading the charge to cut rather than tax - and no one is joining him. Where are our Republicans on council? Surprisingly silent on the core Republican philosophy of small government and low taxation.

Here's my suggestion. Before you begin to even consider a yes vote on increasing taxes on Toledoans, mandate that all non-union employees incur a payroll deduction to help pay for their insurance coverage...Not just city council members, though they should pay, too - but ALL city employees not covered by a union contract. After doing this, the city will have better standing to go back to the unions and request an agreement on payment as well.

Then, roll back all the PERS pickups that have been granted to all non-union employees. The city is required to contribute a specific percentage toward PERS for every employee. But over the years, as unions bargained for pick-ups (the city 'picking up' part of the mandated employee contribution), those pick-ups were applied to non-bargaining employees as well. Eliminate the PERS pick-ups for all non-union employees, including the Mayor and Council if they currently enjoy such a benefit.

Again, this will give the city better standing for similar discussions with the unions.

Some other things that can be done? Council can pay their own parking, eliminating the $5,000 cost for parking expenses separate from their parking garage costs. They can also eliminate the $13,000 auto allowance...use your own cars and claim a deduction on your income tax instead of charging the public for travel or having us pay for a vehicle for you to use.

The Mayor can eliminate some of the publications he's getting...his budget went from around $700 to over $2,000. He could also use email instead of sending formal letters and reduce his postage costs. And why he needs $18,000 in outside printing when that line item hasn't been over $8,000 in several years is beyond me. I guess that he's using our tax dollars for publicity purposes while saying there's nowhere else to cut the budget.

He can also take a lesson from Gov. Strickland and reduce his 'food' budget which is currently around $6,000. Miscellaneous supplies is the line item where you can hide a bunch of goodies...it's at $6,600 but hasn't been over $2,000 for several years. Or the $10,000 for marketing, $13,000 for travel, $1,000 for parking (not the government center garage), $5,600 for vehicle rental, $18,000 for advertising (separate from the already mentioned marketing), $30,000 for interns (let them earn credit instead of paying them), $18,000 for temps, $21,000 for misc. charges and services ... the list goes on.

And these are just two offices. With these kinds of expenses, don't tell me that you have to cut police and fire or charge for garbage pickup!

One person who spoke during the public hearings said the budget needs to be 'nickeled and dimed.' I agree. While each of these items seems like a small amount when you look at them individually, every city department has these kinds of expenses and they add up.

Cut these things first - then we'll see if we need to talk about tax increases conveniently called a 'garbage fee.'

Link to The Blade which has downloadable pdf's of revenues and expenses...these are large files.