New labor contracts costly for city
By Janelle Patterson
The Marietta Times
After Thursday’s 5-2 vote to approve the third and final labor contract for unionized employees, Marietta City Council is now in discussions about how to pay to maintain staff and services.
“We have the appropriations now for those contracts…it is going to have a major impact on the city’s finances and the carry-forward balance into the next year. (Now) we’re discussing the three possibilities of an (increased) income tax, adding a property tax or doing nothing and we’re continuing that discussion from to 6 p.m. next Monday,” explained Finance Chair Mike Scales.
Scales followed his pattern to vote against the final contract Thursday for the Teamsters, as he did for both the Fraternal Order of Police contract and the International Association of Firefighters contracts at previous regular council meetings.
Cindy Oxender also voted against this contract due to a concern over parity with the other bargaining units.
Each time Scales voted against the contracts he said his reason was that the city did not yet know how the increase in wages, uniform allowances and benefits would be paid for.
“We had estimates but it wasn’t until Monday that we had the tally,” he added. “Now it’s up to the administration to come up with a plan for how to pay for it.”
Safety-Service Director Jonathan Hupp explained that the sustainability of the three contracts is plausible, but there are multiple factors that can impact the future of the city’s finances.
“We don’t know what’s going to happen with (Ohio) House Bill 49 and each year that passes where the city does not find additional revenue streams through income tax, oil and gas royalties, levies and additional businesses, it will become harder to remain solvent,” he said.
House Bill 49 is currently disputed by multiple municipalities across the state for infringing on local control of income tax. The bill moves the collection of local income tax from the municipal level to that of the state and takes a processing fee off the top before returning remaining funds to the municipality at an undetermined date. More than 160 municipalities are fighting the legality of the bill in court.
“The city has attempted to adjust to a lower income stream while at the same time to maintain minimum services,” said Hupp. “We need new businesses and we need new revenue streams before something more dramatic has to occur. In the past, people might remember when the city lights were turned out to cut costs. Now the city has retrofitted its lighting systems to the most energy-efficient bulbs, has aggregated every gas and electric account it has to forecast prices at the lowest rate possible and when we go out and buy vehicles and equipment we take bids and go after sales.”
Other cuts over the years to keep the books balanced have included cutting the park and cemetery crews from 15 workers to departments of two people each, Hupp added.
“And the streets department had almost 30 and are now down to 10,” he continued. “Services have been cut 60 to 70 percent. Our police department operates on minimum manpower. Unfortunately, that’s why our citizens sometimes have longer wait times because we’re trying to save costs. With every fire, we have to do a call out because we’re also at minimum fire staff too.”
Hupp said the negotiations don’t add to the ranks of the city’s staffing, they are simply to maintain current services.
Assistant Safety-Service Director Bill Dauber provided council Monday with the tally of $472,455.40 that the three contracts add to the city’s expenditures in a year.
“They processed the appropriations in order to fund the contracts,” he explained. “The teamster contract’s impact is marginal since the rank and file of those employees (work under) what’s covered by the enterprise funds; water and wastewater. The real impact of their contract is the streets fund (which) is not an enterprise fund.”
Councilwoman Kathy Downer speaks often against additional hits to the streets fund, of which she is protective as council’s streets committee chairwoman. The fund struggles under the constraints of both a cost-sharing measure called Maximus and each year already draws heavily upon grant and loan funding for the yearly asphalt paving and ADA curb ramp projects.
An enterprise fund is one that by law takes in revenue which can then only be spent on the specific purpose of the fund. Residents and businesses on city water and sewer pay fees and usage rates into these funds bi-monthly.
The new General Fund projected expenditure due to the negotiations is $11,097,723.60. This lowers the projected carry-forward for the General Fund by $133,541.35, making the new carryforward balance based upon projected 2018 revenues in the decrease from $1,209,291.67 to $1,075,750.32.
This move is away from the administration’s goal for a carry-forward balance year-to-year in the General Fund which is a minimum of $1.5 million to pay for city services and bills until the next year’s revenues begin to refund city coffers.
Council will discuss options to either add an income tax increase or property tax to the November general election ballot at its next finance committee meeting on April 30.
The last time the city saw an income tax increase was 31 years ago. Since then the current rate of 1.7 percent of earned income has not changed. An income tax increase proposed in the May 17 election failed.
All council meetings are held in room 10 of the Armory, 241 Front St.
By the numbers:
¯ Marietta City Council approved the final bargaining unit contract Thursday and Monday reviewed the appropriations needed to support new labor contracts.
¯ The following are the impacts of those contracts on city coffers:
¯ Teamsters Agreement:
¯ General Fund: $28,811.65.
¯ Water Revenue Fund: $66,721.90.
¯ Sanitary Sewer Fund: $40,157.79.
¯ Streets Fund: $30,295.06.
¯ Total Teamster additional impact: $165,986.40.
¯ Fraternal Order of Police Agreement:
¯ Total additional impact exclusively on the General Fund: $100,993.
¯ International Association of Firefighters Agreement:
¯ General Fund: $118,183.
¯ Fire Levy Fund: $87,293.
¯ Total IAFF additional impact: $205,476.
¯ Cumulative Total Additional Impact: $472,455.40.
Changes from the 2018 City Council-approved budget:
¯ New Streets Fund expenditure: $5,790,007.06.
¯ New Fire Levy Fund expenditure: $1,543,761.
¯ New Sanitary Sewer Fund expenditure: $4,608,052.79.
¯ New Water Fund expenditure: $3,880,403.90.
¯ New General Fund expenditure: $11,097,723.60.
¯ This lowers the projected carry-forward for the General Fund by $133,541.35.
¯ The new carryforward balance based upon projected 2018 revenues in the General Fund now goes from $1,209,291.67 to $1,075,750.32.
¯ The administration’s goal for a carry-forward balance year-to-year in the General Fund is a minimum of $1.5 million to pay for city services and bills until the next year’s revenues begin to refund city coffers.
Source: Marietta Assistant Safety-Service Director Bill Dauber.