Toledo Refuse Fee Complaint

Over the past year, I was increasingly convinced the Refuse Fee imposed on property owners in Toledo on April 28, 2007, was not legal. My gut instinct just does not accept that the City can add a "fee" against every property owner in Toledo to pay additional monies and call it a "Refuse Fee" when we already pay income tax which is supposed to pay for refuse services. Once collected, it is dumped into the general fund.

Have you considered that if the 3/4% tax does not pass, if the Refuse Fee is legal, Council could simply increase the amount of the fee to cover the amount lost by non-passage of the 3/4% tax. They probably would not do that, but they could, if the Fee is legal. All they would need to do is raise the "Fee" to $53 per property (91,000 per Mike Collins) per month to equal the $58,000,000. If it is legal for Council to do this, then there would be no reason at all to ever put a tax on the ballot.

To anyone interested,
THIS IS A TAX -- THIS IS NOT A FEE -- VOTERS MUST APPROVE A TAX!!

That's the bottom line, the nitty gritty of this lawsuit, this "fee" is not legal.

For several months, I spent an extensive amount of time researching and reaching out to advisers regarding the Fee.

In the search, Maggie Thurber recommended I contact Attorney Kurt Wicklund, as he may be interested in the case. He and the attorneys of the Law Firm, Ciolek & Wicklund, 520 Madison Avenue, Suite 820, Toledo, OH 43604, (419) 931-6431, Fax (866) 890-0419, Email: wicklund@ciolekwicklund.com, initially agreed with my assessment but took the challenge to further research the issue to confirm whether the Fee is or is not legal.

As a result of this research, it was determined the fee is not legal and today, February 28, 2008, a complaint has been filed in Common Pleas Court on behalf of myself and property owners of Toledo against the City of Toledo. The complaint is in the list of "Links" on this page.

2008 Toledo Budget

In the Links section of this blog is a link to the budget on an Excel spreadsheet which can be downloaded and used for your own analysis of the budget. Help yourself!

Commentary #5 Toledo Budget 2008, Revenue

Revenue Analysis
Are revenue items missing in the budget for 2008? As I reviewed the Revenue section, it seemed there were gaps which may be of concern and the following information and analysis is offered for consideration.

The linked spreadsheet is an analysis of the expected revenue as reported by the Administration. It is sorted by the greatest actual dollars by Organization in 2006 compared to the expected dollars by Organization in 2008. Many of the accounts had one or two items with a variance in the detail, while others (such as "Treasury") had great variations. Next to the dollar amounts is a brief explanation of the cause for the increase or decrease in the revenue with the exception of Taxation.

In the Detail for taxation, no allowance for refunds to businesses or individuals was included in the model. This would seem to leave the City open for unfunded costs since the amount of refunds were significant 2004: -1,089,790; 2005: -1,124,086; 2006: -1,386,489; 2007 & 2008 -0-. Is it possible there were no refunds in 2007 and none expected in 2008?

Treasury is a total different situation as there are numerous differences between 2006 and 2008 by Account Description. The detail begins on Row 47.

It has been well documented that Federal and State Grants have declined, but the difference in Grants between 2006 and expected in 2008 is staggering. Have we missed opportunities or has the availability of Grant money really dissolved? The comparison is referenced beginning with Row 124 which shows:

GRANTS
Federal Grants $18,777,186 (2006) (2008 - "0")
State Grants $18,122,466 (2006) (2008 - "0")
State Grants/Federal Fnds $8,676,909 (2006); $300,451 (2008)
TOTAL GRANT REVENUE $45,576,560 (2006); $300,451 (2008)

Commentary #4 Toledo Budget 2008, Refuse Fee

Fred LeFebvre interviewed D. Michael Collins about the proposed Refuse Fee which will most likely be approved to generate additional revenue again this year as it was last year. In all comments about the refuse fee, there is no suggestion that anyone on Council is taking a hard line look at the budget with the plan to live within the means of the projected revenue.

If Mr. Collins is so terribly concerned about the landfill, then perhaps he should look at alternatives such as waste to energy incineration. Waste for Energy

To consider investing in new and additional equipment, containers with micro-chips to verify a resident is recycling is just more government imposing more constraints on the residents. Next, there will be a penalty for any household that signs a waiver stating they will recycle and they don't, -- another fine for the indiscretion. If the budget is complete and we look at 91,000 households, the average cost per year for refuse collection is $124.50 per household. The planned increase in fees would potentially cost each household and additional $120.00 per year unless the resident chooses to recycle, we have yet to hear what that will cost.

City Council must do better, doubling the cost is not acceptable.

City Council must do better.

Notes of Interview with D Michael Collins, 2/18/08, a.m. by Fred LeFebvre, 1370 WSPD radio.
D. M. Trash tax or fee, however you want to look at it.
What is good public policy, I delved into recycling issue.
Joe McNamara and I challenged each other with ideas.
The gist: recycle, no fee. No recycle, $10.00 per month
It’s difficult to capture the whole notion [provided following #’s]
91,000 households in city
32% said they recycling
Reality is 26% recycle not 32% recycle

Fred: How do they check

D. M.: They do not
They do not police the system
I consider [sic saying they will recycle but do not] this misrepresenting the city
We are loosing $100,000 for those who do not recycle
If we are not counting who is recycling, how do we come up with 26%
I went through neighborhoods and checked, I checked for 6 weeks in 3 of my neighborhoods and counted how many recycled. It was closer to 26% not 32%.
27 years for the landfill, $80 million to replace
I want to see recycle at 60% 18000 tons not into landfill
We pay a tipping fee to EPA, $5.50 per ton, removing 18,000 tons out of landfill equals $100,000
Money we receive from recycle will double to $125,000
We create a new cell every 4 years ($4 million per cell), increase life by 15 to 17 months
Looked at Portland, Or, they are hoping to get 70% of community to recycle
I would like 100%

Fred: If that happened, no income

D. M. But that won’t happen

Fred: Who won’t recycle?

D. M. Hope 40% (not hope but realistic) will reject. There would be no minimum requirement.

Fred: How to implement?

D. M. Will have to retool the equipment, less packers, more recycling. It will be a shift in the concept, it must be phased in. there will be a chip in the recylce containers, the city will buy and supply the containers, buy new equipment, we will need to buy new trucks because the city has to go to automated equipment. Right now we have 6 trucks in the recycling system, will have to double, it’s about $120,000 to re-double that #. To micro chip, it’s between $120,000 to $140,000 to equip that brings the fleet up to that number.

Fred: Just sounds crazy, would it be good public policy to privatize?

D. M.: Once you’ve done it, you’ve sold all your equipment, your out of the business, to recaptilize, to go back into it in case you’ve made a mistake, is literally speaking, impossible. You can’t go back into it. The rate of $8.00 per household in Perrysburg is limited to one can.

Fred: Has the city looked into privatization at all?

D. M. I haven’t seen the studies, I’ve been told they have.
The problem you have with recycling is you can go into the first year and have a very apealling number, the 2nd year it may look appealing but the 3rd year you’re over the barrel and you’re going to be at their mercy with privatization.
In Lambertville, they are paying $17.00 per month for controlled refuse pick up and paying within the $17.00 a fee for recycling.
Population on fixed income, all they have to do is recycle and it doesn’t take anything out of their annual income flow.

Fred: Emails & calls -- Don’t have trash to recycle, I take it to Krogers, they don’t like it.

D. M. Not talking about how much volume is in the container, how do we as stewards of our environment, best protect the ecology and also cost defer all these issues to the future? And recycling at that # saves us in a cost deferment millions and millions and millions of dollars, I think is realisticly selfish if we don’t take the measured steps if we don’t increase the lifespan of the that landfill by 10 years because we may not be burdened by that expense, but a generation behind us will and they are going to have to figure out to fix it and it’s not going to be $80 million when the fix is needed.

Fred: At some point that landfill will be filled and our kids will have to look at it.

D. M. What we’re really doing is slowing down the filling of it.
I look at it from an analagous situation, our car is going to have to be replaced, so why change the oil? Because if we don’t change the oil, we’re still going to have to replace the car, we’re just going to have to replace it sooner. And so I use that as a way of using an analogy.

Fred: But you aren’t involved in the cost of my car, if I said I would have to pay a fee if I didn’t change my oil, that would be different. In this case Council is looking at putting a fee to force people to do something that maybe they just don’t want to do. There are people out there that just don’t want to recycle for one reason or another. Not cost effective, don’t believe in it. Being penalized for that belief.

D. M. Not really, they are making that decision. Your penalizing them is you say everybody must pay a fee which is the current program. You have the option of saving $120 a year by recycling. All you need to do is in a bin provided by the municipality, enter you recylables and the benefits are as follows:
· You’re gong to save $100,000 per year on tipping fees (sic EPA) which we pay
· You’re going to increase the landfill life by 9 years
· You’re going to increase the cell life by at least 15 to 17 months.

Commentary #3 on 2008 Toledo City Budget -AMBULANCE SERVICE

In 2007, it was decided by Council to approve the take over of the private industry Ambulance Service to "enhance" revenue. On the surface, it was estimated the take over could generate $1.2 million per year. Toledo Blade article


As it would begin in July of 2007, it was estimated the revenue generated would be approximately $600,000. There was no consideration in the model to include the cost of labor for the service as the fireman "They agreed the department could staff the five basic life support ambulances with current firefighters". In reviewing the budget, with benefits, wages and pension, the Toledo paramedics who would staff the ambulances earn an average of $45.00 per hour.

To determine the true cost and net revenue, the cost of labor must be considered in addition to the loss of revenue which would have been generated through taxes if the services had been performed by the private sector. The model used to determine the gross revenue and total profit of this service should include:

# of Runs
Total manhours for runs
Total $ Billed
Total $ Received
Amount of revenue lost from private sector through fees and taxes
Cost of Vehicles
# of Vehicles leased
Any maintenance costs
Manhours to maintain
(clean, fuel, restock supplies, etc)
Lease fee
Were additional fire fighters called to report to fight a fire because the on-duty men were on an ambulance run and not available?
If so... additional cost for this coverage.

Commentary #2 Toledo Budget 2008 Payroll

In an attempt to determine salaries and benefits for all city employees, I went through the budget and created the classification “payroll” and then sub-accounts to describe the expense.
Payroll analysis

The following is a summary of the wage and benefits for the Employees of the City of Toledo which are projected for 2008:

2978 Estimated # of employees for 2008
$51,711 Average wage
$29,806 Average benefits
$81,517 Total average wages and benefits
$242,757,173 Total estimated wages and benefits 2008

The 3 major increases are for Base Salaries, 9%, Retirement Contributions by the City, 18.5%, and Medical Insurance, 22.9%. There is also 2.9 million allotted for “severance” (63.7%) for 2008. It would be an alert City Council who would seek a benchmark of the private sector to determine comparable wage and benefit packages for comparison to use as a model in the next negotiations with the unions.

With an increase in medical insurance of almost $7,000,000 dollars, it is necessary to expect city employees to pay a portion of the benefits. At $200 per month (on average), almost $7,000,000 in contributions to the plan would be generated. Additionally, co-pay for doctor visits and prescription drugs of $15 to $20 would be appropriate. The study of private industry would help in the decision on how to manage the benefits in the future.

The retirement benefit package needs to be revised, we cannot continue paying 28% towards the Pers program.

Why is Personnel Services Reimbursement cut by $731,000 + ?

In looking at the negatives on these last categories, are we confident the estimates are accurate? For example, why a negative on “compensated absences” unless it was applied to a different line item; if so, what line item has absorbed this cost; if not, an explanation is warranted.

It is obvious the payroll budget has outpaced the revenue of the city and the private sector, it must be amended.

Commentary on the 2008 Toledo City Budget

Once again voters will be asked to renew the ¾% “temporary tax”. This ¾% tax was originally passed on June 6, 1982. At that time, refuse collection had been cut in the summer to every other week, was limited to quantity allowed at the line and no white goods (appliances). Additionally, 1600 city jobs had been cut, the police force was at 615 and they had lost all of the 86 civilian staff. Vehicles were in disrepair, the parks were closed and the pools were not opening. The tax was expected to generate $22 million (link to Blade article http://docs.google.com/Doc?id=dd7thkjj_2hgwbxvtb). Now, 26 years later, we are in the same predicament.

In 1982, Councilman, Donna Owens, believed the tax could be sold to the voters because it was temporary (a ½% permanent increase was soundly defeated the year before) she commented about the possibility of renewing the tax in the future stating: “and they have the chance to say so at the polls if they do not like the way the additional money is spent”.

The language of the levy guaranteed the revenue would “funnel the proceeds in 3 areas:

• ¼% police and fire for hiring 115 police officers and 32 fire fighters and for upgrading equipment (especially fire equipment)
• ¼% to the general fund for restoration of weekly garbage collection, reopening the parks and restoration of cutbacks in the health department.
• ¼% for capital improvements fund for repayment and rescheduling the city’s debts, resurfacing streets, restoration of storm sewers and demolition of vacant and vandalized houses.

Over the past years, the wording has been diluted until it no longer specifically covers refuse collection which has gone unnoticed by the majority of voters. Ask your neighbors “what is to be paid for by the ¾% temporary tax?” Most will say, police, fire and refuse collection. Instead per the Municipal code, it covers:

· one-third (1/3) shall remain in the General Fund for police, fire and other Safety Department responsibilities,

· one-half (1/2) of said increase shall remain in the General Fund,

· one-sixth (1/6) of the said increase shall be allocated to the Capital Improvements Fund.

With this wording the city is no longer bound to provide the refuse service we expected when we voted for the levy in 2004.

How is the money being allocated? Our politicians have spent 26 years “negotiating” unsustainable contracts with the Unions representing the city employees. We will not survive as a community if our City leaders continue on this path of unrealistic wage and benefit packages. How did this come about as we entrusted our taxes to the politicians of Toledo?

The Blade article last week which covered the Mayor’s fundraiser paints a picture of what is to come when they reported that in attendance at the $500 per ticket fundraiser were “all the union chiefs”. Blade article

Backroom deals are cut with the union chiefs to garner endorsements, contributions and campaign workers for the candidate who will offer the best package if elected. The result over the past years has been an exploitation of the generosity of the electorate who continues to offer up additional taxes to pay for these agreements. Voters are not naïve and accept this is “politics as usual” accepting the status quo; however, it has gone too far and needs to be remedied.

The challenge for those currently in office is to understand we are at a critical turning point in Toledo politics. They must set aside self-interest and concern for reelection with the understanding that the funds to finance the current contracts do not exist and voters are financially unable to continue digging deeper to finance such folly.

Commentary # 2 to follow.