On Monday July 20 Trotwood City Council approved a new contract for the city manager and authorized him to negotiate with the city employees to seek deep cuts to mitigate a $557,000 budget shortfall.
The 2009 budget developed last fall included conservative revenue expectations but the deepening recession and growing unemployment have taken a toll on the city’s income taxes. Trotwood’s unemployment rate in June rose to 15.3% according to the state department of jobs and family services. That’s the highest rate in Montgomery County where the average is 12.4%.
“The shortfall is a reflection of the nine month downturn which no one fully predicted in Trotwood, Montgomery County, the state, or the nation,” said Trotwood city council member Rap Hankins.
Besides income taxes, which the city monitors on a month-to-month basis, Trotwood city manager Mike Lucking said property taxes are declining too. “The county projected a 2% decline last fall, our budget projections were even more conservative than that,” he said. “We will know in about a week what the second half numbers show.” Property taxes are due every six months.
Lucking said the third area is a reduction in money from the state’s local government fund. Yesterday the state budget office notified cities to expect a 14.4% decrease in this year’s allocation. That’s about what the city expected and is already included in the $557,000.
“This budget is a moving target and impossible to know how it will turn out,” said Lucking.
To keep from draining the city’s already small reserve fund Lucking has been negotiating with the city’s four unions and non-union employees.
“We’ve proposed to the entire organization, in order to reduce the projected deficit, to take a 7 ½% wage rollback and 80 hours furlough, (unpaid time off) that will result in an 18% reduction in wage cost through the end of the year.”
The unions are expected to respond next week and Lucking met with the non-union city employees Friday. Lucking does not want to use layoffs authorized by the city council but fears that less desirable solution would be necessary if the unions do not agree to the wage reductions.
“Layoffs are not a good solution, they adversely effect service delivery, increase unemployment liabilities and health insurance liabilities (cobra), and the city will have to pay for unused leave which uses up more cash flow.” “We are a thin organization right now with no excess spending or personnel.”
Lucking’s new contract includes the same cuts that employees will bear. But that was not enough for two city council members who voted against his new 3-year agreement.
Council member Mary McDonald read a long list of criticisms. She said she didn’t believe the city should continue with Lucking. She cited the lack of economic development, poor communication with council members, excessive spending on the Salem Mall site, and for not expecting the city’s recent shortfall. She was joined in the 5-2 vote by council member Bettye Gales.
Hankins defended the manager for the council majority. “You have to look at what is happening in the entire region and how this effects Trotwood . . .what isn’t clear is if the manager should be held accountable for things beyond his control.”
Mayor Darreyl Davis also supported the manager. “We must hold ourselves as well as the city manager accountable for a new direction,” he said. “Our region has suffered 10-12,000 jobs lost in the past two years, this effects us.
Hankins attended a presentation by University of Dayton Economist Richard Stock Wednesday. Stock’s economic forecast for the region doesn’t show signs of recovery until 2011. He also suggests that Trotwood, Harrison Twp and Jefferson Twp could be the slowest to recover because of the higher age of their respective workforces. These communities also have a higher percentage of African-American population which has seen greater impact from the elimination of manufacturing jobs.
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