Mayor Jeff Reser: Vote will cost city $328,000 it doesn't have; time to eliminate tax credit
A split vote between six Bucyrus City Council members will cost the city hundreds of thousands of dollars it doesn't have, Mayor Jeff Reser said Wednesday.
He now recommends that council completely eliminate the city's tax credit for residents who work in other cities and is warning cuts will be necessary.
A three-three vote on a fact-finder's report regarding the city's collective bargaining negotiations with the International Association of Fire Fighters Local 1120 means the city must accept the report and comply with its findings, Reser said. Among other things, that means the city will have to pay $327,855 in retroactive pay for 2022, plus pay higher wages for years to come.
Council members voted on ordinance Tuesday
Immediately after roll call during Tuesday night's regular council meeting, President Jenny Vermillion called for a motion to go into executive session to consider a collective bargaining strategy for the union employment contract with the firefighters' union. Council remained in executive session for more than an hour, then returned to regular session without comment.
Bucyrus Ordinance 58-2022 by Gere Goble on Scribd
Later in the meeting, an emergency ordinance regarding the fact-finder's report was brought to a vote, with council members asked to vote "accept" or "reject" instead of the regular "aye" or "nay."
Three members — Kevin Myers, R-at large; C. Aaron Sharrock, D-Second Ward; and Steve Young, independent-Fourth Ward — voted to accept the fact-finders report. Mark Makeever, R-at large; Dan Wirebaugh, independent-at large; and Terry Spiegel, R-Third Ward; voted to reject the report. Benton Potter, R-First Ward, was absent.
"If they would have rejected it, we would have had one more step, but they actually voted three to three, and that allowed them to accept it," Reser said. "That means we are bound by the findings there."
"I had recommended that we kept fighting, because it was very expensive to the city," he said. "The police had settled on a dollar an hour plus a 4% raise this year, and that's what we offered the fire department. That wasn't acceptable to them; they wanted more. So that's why we went to mediation, and then to these other steps."
Report makes raises retroactive to Jan. 1
The judge who did the fact-finder's report awarded all firefighters a 10% raise for this year with an additional $2 an hour for medics, Reser said, "and then next year ordered a 3% raise, and then the following year a 2% raise."
The fact-finder also "did something that was very upsetting to us," Reser said: While police officers' dollar-an-hour raise was retroactive to September and only the 4% raise was retroactive to the first of the year, all of the firefighters' additional pay is to be retroactive to January.
The fire department's budgeted payroll for 2022 was $1,719,000, according to figures provided by the mayor. He estimated total hours work by firefighters this year at 50,638 and total overtime at 12,751 hours.
The 10% wage increase in 2022 will cost the city taxpayers $171,900, according to the figures provided. The additional $2 per hour for medics will cost $67,854; additional overtime for medics, $24,645. Additional pension cost is $63,456.
The total retroactive payment is $327,855, while the additional cost for 2023 will be $73,767; and for 2024, $50,662, according to the mayor. The 2023 and 2024 figures do not include the potential of hiring additional medics as current non-medic firefighters retire.
"It's a $300,000 hit to the city budget at a time we don't have the money," Reser said. "We're struggling right now. You'll have to ask the three people that voted for it what they were thinking and where they think we'll get the money, but it's going to be a financial hardship to be able to find the money and balance the budget."
Contract negotiations with the union began last November. "We have a negotiator, a firm that we use, Zashin and Rich out of Columbus," Reser said. The firefighters rejected several offers, and the city withdrew one offer after learning a major employer would close. "What they got is actually more than they even asked for originally, what they were awarded."
Myers: Firefighters deserve more pay after taking over EMS duties
Myers, one of the council members who voted to accept the report, said he learned Tuesday night the administration had spent more than $63,000 on legal fees during negotiations.
"It just floored me that they had spent so much money on an outside attorney when we have an attorney in the building," Myers said. "Just to fight the union. In the beginning of the process, we weren't all that far off, and I think we're worse off after we spent that money fighting them."
Tensions were high during the meeting, he said.
"That was pretty contentious," Myers said. When it came time for the vote, "the room was filled with just about every firefighter we employ in the city... they were all in the hall, waiting to see how we voted."
The big issue in the contract was pay, he said.
"We've asked these guys to take on more responsibilities, taking on the EMS, and I think that they should be appropriately paid a little more for that extra work they're doing," Myers said. "And the administration wanted to fight that."
'There's going to have to be some cuts'
Reser said he's trying to keep the city out of fiscal emergency.
"That's what we're dealing with right now," he said. "We're just kind of surprised about it. It is what we have to deal with, so we're going to be putting our heads together and thinking about our next moves. We have to balance the budget, so there's going to have to be some cuts. We haven't analyzed that yet."
The city already has been dealing with revenue issues. The closure of the Bucyrus Lamp Plant by GE Lighting, a Savant Company, in September alone is expected to be a $300,000 hit to the city's budget next year. Reser recommended earlier this year that council reduce the tax credit the city gives to citizens who work in other cities and pay taxes there. At a special finance committee meeting last week, he suggested asking voters to approve both an income tax hike and a property tax for equipment.
Committee members asked him to prepare a complete plan on what actions the city should take.
Mayor shares his recommendations to council
Reser said he was sending out his recommendations to council members on Wednesday.
"They asked me to make a plan; they for some reason didn't want to make their own plan," he said. "I told them OK, I'll give you the plan if that's what you're looking for. And I'm hoping they act on it."
On Wednesday, he provided a copy of his plan to the Telegraph-Forum. In it, he asks council's finance committee to vote on the plan this week and send it to full council for a vote on Dec. 20.
"Spending on safety forces is growing faster than any other expenses for the city," Reser states in his plan. "Last night’s vote made balancing the budget a difficult if not impossible task because revenue is expected to decline in 2023 (due to the loss of GE) while expenses for safety forces are expected to increase by over $500,000. Spending on safety forces is not expected to slow in the future. Cuts in expenses to balance the budget will primarily come from the police and fire departments since those expenses are the vast majority of all expenses, approaching 80% of tax revenue."
Reser now proposes reducing the income tax credit to zero. At a meeting last week, he had suggested reducing it in half, but after the vote on the fact-finder's report, "I now suggest that the entire credit should be eliminated," his plan states. "Full revenue impact of this reduction will not be received until 2024."
"Several members of council discussed the possibility of placing an income tax levy on the ballot, possibly designated entirely for safety forces," Reser states in his recommendations. "This will be your call but I believe that the tax credit elimination is the most equitable solution."
He also suggests a 0.55 mil property tax levy for police and fire equipment be placed on the ballot. Such a tax would be expected to raise $100,000 per year. "This levy will not provide all the needed funds to purchase equipment outright but will be able to be used to make bond payments for the equipment," the recommendations state.
He also recommends council members consider using the Regional Income Tax Authority for income tax collection.
"Decisive action is needed," Reser states in his summary. "I have given you several recommendations to act upon. Any action taken now will not begin to show results for over a year, which means that 2023 will be a challenging year depending on how revenue is received. We cannot afford to extend the current revenue shortfall beyond 2023. ...
"I mentioned in earlier communications that this is likely to be the most important set of decisions that you will have to make as elected officials. Please think of the vision that you have for the future of Bucyrus and its citizens as you prepare to vote."
ggoble@gannett.com
419-559-7263
This article originally appeared on Bucyrus Telegraph-Forum: Mayor: Vote on union contract will cost Bucyrus $327k. Cuts coming
