Police union doubts city’s claim
By Jane Beathard
“Where’s the City of London’s fiscal crisis?”
That’s what a spokesperson for the union that represents the city’s police officers wants to know.
Joe Hegedus of the Ohio Patrolmen’s Benevolent Association (OPBA) doubts claims by administrators and city council of a precarious financial situation. He began representing London’s officers in 1990.
“The city always has a financial crisis,” Hegedus said.
He noted that crisis always seems to appear whenever police contract negotiations are underway. The current OPBA contract ends Dec. 31.
“Every time we go to negotiate, we have a fiscal crisis,” Hegedus said.
In a meeting with The Madison Press last week, Hegedus presented officers’ perspective on the city’s financial crunch. That perspective included an independent review of city books since 2009 and the proposed budget for 2013. The union hired forensic auditors from Sargent & Associates to do the work.
Auditors found year-end balances in the general fund — money left over — increased steadily between 2009 and 2011. It was $1 million in 2009 and $1.1 million in 2010. At the end of 2011, the city had $1.2 million in its general bank account. Those funds will fall to $867,000 at the end of 2012, if income and outgo hold steady for the next six weeks. Original budget projections saw only about half that amount in carryover.
“We acknowledge that the city revenue estimates and adopted budget (for 2013) must be conservative,” Sargent & Associates said. “But, a 19 percent reserve is certainly not …in the danger zone.”
Hegedus believes London is far from an “extremely dire” financial situation, as members of city council and administrators say. Besides, cities should not be in the business of showing a profit.
He said the difference between projections and fiscal reality lies in better-than-expected revenues and less-than-anticipated expenses.
For example, auditors found the police department will likely spend $223,000 less this year than originally projected.
As a result, Hegedus can’t find a good reason for cutting the department’s budget by 15 percent next year. Police chief Dave Wiseman told council on Nov. 1 the planned reductions will mean layoffs and five fewer officers patrolling London streets, impacting public safety.
“No way is it (15 percent) a fair and equitable cut,” Hegedus said. “Council is cutting three times as much from the police budget as other city departments.”
Council will likely vote Thursday on the proposed 2013 budget.
Safety-services director Steve Hume agrees with some Hegedus arguments, but said times and public finances are changing.
He fails to see a correlation between the timing of police contract negotiations and the city’s financial difficulties.
“We had legitimate financial concerns at the last (police contract) negotiation,” Hume said. “But it hasn’t happened each time since 1990.”
He agrees the city has a history of projecting budget deficits that did not occur. But keeping enough money in the bank to cover two months of expenses is just good accounting practice.
He said current council members and administrators have a better understanding of city finances than their historic counterparts. As a result, they show more concern.
Commercial activity, personal property and inheritance taxes are gone in Ohio as a result of changes to the state’s tax code. Under Gov. John Kasich, the State of Ohio reduced funding to local governments in order to balance its own budget. More and more, the city must rely on a 1 percent income tax for operating revenue, Hume said.
If the police department appears to suffer greater loss in the proposed budget, that’s because it has the most to lose.
Forty percent of the general fund budget goes to police operations, Hume said.
In comparison, the fire department absorbs 20 percent; building maintenance gets 5 percent and recreation takes 3.7 percent.
“We’re spending more on police than other departments,” Hume said.
As London learns to rely on income tax, it must remain attractive to new businesses and employers. Good housing, low taxes, safe neighborhoods and good quality of life are more important than ever, he added.
In 2008, council ceased splitting income tax revenues between capital improvements and city operations. All money now goes to operations, leaving nothing for needed repairs to streets, sidewalks and infrastructure. Decreased financial support for parks and recreation will also make London a less-desirable place to live.
Neither Hegedus nor Hume would discuss current police contract negotiations, citing confidentiality restraints.