Toledo city council raised objections this week over two administrative budget proposals including one that would use street repair funds for an office lease and another that would give temporary funding to cover first-quarter expenditures.
At the Nov. 29 agenda review for the Dec. 6 meeting, council heard testimony from Doug Stephens, the director of the Department of Transportation who requested approval of a 13-year lease to move into larger space at One Lake Erie Center for the Division of Engineering and Construction Management.
The proposal calls for about $360,000 in rental fees in the first year, with two percent increases yearly for the next 12 years. The total cost of the lease is projected to be $6.1 million. A portion of funding for the lease would come from the tax road improvement fund, a four-year, quarter-percent income tax that voters approved in November of 2020 for the sole purpose of residential street repair. The tax is projected to generate about $19 million annually.
Other sources funding the lease would come from the general fund, the capital improvement program fund, the water operating fund, the sewer operating fund, and the storm water utility operating fund.
Councilman Katie Moline does not believe street repair funds should be included as a revenue source to lease office space. To ensure that money for road repair is being allocated properly, Ms. Moline requested a report from Mr. Stephens showing the breakdown of work conducted through proceeds from the tax road improvement fund.
“My understanding was that the promise to voters is that [the tax] would be used for road construction, so I’m wondering why we would be using that fund for this,” she said. “I just don’t think any Toledo citizen that approved that tax increase thought it would be going to office space for an engineering department.”
One Lake Erie Center currently houses the office, and the new space would be on a different floor with 15 percent more work area, which is needed for the about $40 million worth of repair work completed annually, Mr. Stephens said. He also said other fees, such as overhead, design, testing, and inspection, are also associated with road repair work project costs, which would fall under the road tax.
“I think it’s a matter of what you define as project cost,” he said. “There are a lot of dollars that go into the design of a project cost that I would say are fairly included in that. I know we try to keep that to a minimum so we can get a maximum on our construction costs.”
In early 2020 the division had planned to move into the former Greyhound bus station on Jefferson Avenue in downtown Toledo and in December of 2020 Toledo City Council appropriated $440,000 to configure office space and purchase work stations for that project. But those plans fell apart due to rising costs and developer delays, city spokesperson Gretchen DeBacker said Thursday. Although appropriated, the funds were not expended, she said.
In addition to discussing office lease funding, councilmen on Tuesday also reviewed a request from the city’s finance department to approve a temporary spending appropriation to cover budget obligations such as special assessments and premiums, during a three-month period beginning in January.
Again, Ms. Moline questioned the intent of the ordinance, which she says is written in a way that would give departments free rein to use the extra dollars to expand department personnel without any oversight.
“Last year was a prime example of approving a temporary spending appropriation thinking it was just a stopgap getting us through the beginning of the year when in fact, it was used as a justification to expand departments, expand personnel, expand everything without council having one budget hearing, or one discussion on what was included in that budget,” she said.
Other councilmen shared her concern and Ms. Moline recommended amending the ordinance with new language to specify the exact expenditures that would be allowed through those funds. In addition, an amendment will be requested on the time allotment for the stopgap appropriation from three months to one month for a temporary budget.
Councilmen Cerssandra McPherson and George Sarantou also expressed the need to keep a careful eye on administrative spending by following it month by month.
“I too, share those same concerns,” Mr. Sarantou said. “For example, the department of marketing and communication has a current budget of approximately $700,000 and for 2023 we’re asked to increase that by almost a third to over $1 million, and I do not feel that is appropriate at this time.”
Finance hearings will take place for each department beginning in January, he said.
First Published December 1, 2022, 9:36 p.m.
