On March 5, Toledo City Councilman D. Michael Collins sent the following letter to Toledo Mayor Mike Bell:

City of Toledo

Dear Mayor Bell;

I would like to open this correspondence by thanking you for bringing a new culture of “buy in” and appreciation for consensus building. I have reviewed your correspondence of March 1, 2010 and the proposed operational changes to balance our budget. Now, I would like to share my thoughts as to some of your proposals and what I perceive to be some of the negative consequences that I feel will occur if we move forward and put these matters into our municipal body of law.

Your proposal to increase the refuse fee to $15 per month: When we studied the issue of refuse collection, we looked at comparing the costs if we contracted with the private sector vs. continuing this “core service” as a municipal operation. Our final decision was based on cost and efficiency. The Council’s decision to transition to automation was based upon a cost analysis. The decision to retain this “core service” was made upon the assumption that we could perform this service at $8.75 per month per household compared to $8.40 per month by Allied Waste. We also considered the various fees that are charged by private sector vendors to local communities that do not provide this service. The average fees for these residents are $17.00 per month. In this market, given the fact that we collect 2.25% from all residents who are employed and are not qualified for an income tax credit, my question is, how is this justified in terms of the residential property owners?

My alternative trash fee proposal is as follows: Trash carts were purchased at a final cost estimate of $60 per unit. This translates to approximately 94,000 residents have been provided with $120 in refuse/recycling carts. I offer the following as an alterative to the $15 monthly fee in your proposal. All residences be assessed a $5 per month fee added to the Public Utilities bill for 24 months. That would represent each household has paid in full the cost for their respective carts. I feel we must continue to provide an incentive to households that participate in the recycling program. I suggest retaining the $10 per month fee for those who do not recycle and no charge for those who do. This is based upon at the end of two years we can retire the bond and save $3 million in interest. The assumption is this will generate $9.2 million per year for the next 24 months.

The change in the income tax credit will affect approximately 19,000 residents. While I would agree this could be defined as a quick fix to our deficit budget, please note I said a quick fix and this is not to imply a long-term value. The negative consequences are we will be exposing municipal taxed residents to a tax liability of 3.75% to 4.5%. This, in my opinion, will create the viable option of moving from Toledo to escape this very burdensome tax liability. This will also cause a negative downward shift in residential property values. The operative question becomes, who would purchase their home in Toledo knowing the income tax exposure? The multiplier effect cannot be ignored; small business is the foundation of our economy. The residents who exit Toledo will suspend patronizing the majority if not all of these businesses, the negative outcome if this happening is obvious.

Director Wallace provided me with the employees who have under the PERS retirement plan the ability to retire. Her report states the following:

Years of Service                                 Number of Employees

30 or more                                           109

1 year to be eligible to retire                2

2 years to be eligible to retire             11

3 years to be eligible to retire             13

When you consider the fact that with an Early Retirement Plan (ERP) our human capital costs could be drastically reduced and we would fill the vacated positions only when absolutely necessary. We will be able to address our budget dilemma in a positive way. We need to measure this move and define the total fiscal impact outcome.

Entertainment tax: Cleveland is the closest major city in Ohio that imposes an “Entertainment Tax”, and almost all events and venues are subject to this tax. Your administration now, based upon Toledo’s precarious fiscal position, wants an eight percent entertainment tax. To address the greater issue, jobs are the only real solution. We must experience in Toledo a very positive response to new jobs and the retention of current jobs.

Every household in Toledo, all 94,000 residences, face budgetary challenges. There is in the majority of these residences only a limited amount of dollars for the purpose of entertainment. To increase the costs of attending entertainment productions challenges the quality of life in our community. The “Entertainment Tax” is a regressive tax. I must state that the increase in the costs of going to productions, sporting events and entertainment venues may not be in our best community interests.

In closing, I believe that we need to fully vet the opportunities of an Early Retirement Program. Then I believe we will have a better idea as to how we have adjusted our internal human capital costs.

Respectfully submitted,

D. Michael Collins, Councilman

Tags: City of Toledo

This entry was posted on Friday, March 5th, 2010 at 10:20 pm and is filed under City of Toledo, Community.
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