Tuesday, June 25, 2013

Salary Increases for City Leaders Ignores North Canton’s Fiscal Day of Reckoning

Prepared Comments Made to
June 24, 2013 

            On January 23, 2013, the Repository ran a story titled, “North Canton grappling with shrinking revenues.”  

The story begins with, “Due to slackening tax collection, drastic cuts in state aid and the state’s repeal of the estate tax, the city’s day of reckoning is fast approaching.” 

The story continues with: “City Council is considering fee increases, cuts in services and possibly layoffs of some city employees as the city faces years of growing deficits….Finance Director Karen Alger presented Tuesday a proposed 2013 budget to City Council which shows the city’s estimated spending exceeds revenue by $3.6 million. Of that shortfall, $1.4 million is the deficit for the general fund budget. By next year, assuming the state doesn’t further cut aid, the city has to find a way to raise revenue and cut spending by about $1 million and by significantly more money in later years.” 

How does Ordinance No. 47-13, on tonight’s agenda, an ordinance to increase the salaries of all eight part-time elected officials of the City reconcile with financial realities facing the citizens of North Canton? 

Is this Council trying to rush ever so more quickly to that day of reckoning? 

Possible layoffs of City employees became a reality as seen in a March 13, 2013, Repository story titled, “North Canton lays off fire inspector.” 

In the March story, “Mayor Held cited the city’s financial challenges as the reason for the layoff.”
Can anyone on this Council body recognize the gravity of North Canton’s financial plight or does personal gain come ahead of fiduciary responsibilities?  

I must say that I was very much amused at last Monday evening’s Council of the Whole meeting when Law Director Fox presented his best argument to support an increase in salaries. The argument was the fact that I, as a member of City Council in 2002, over eleven years ago, had urged a greater salary increase than what was proposed at that time.  

Is this body now agreeing that my reasoning for voting NO on the 2002 salary increase was in fact correct? And why is our newly appointed full-time Law Director presenting an argument on behalf of City Council for a salary increase? This is not the roll for a City Law Director in any municipality under any circumstances.  

If anyone wants to revisit the discussion in 2002 for a salary increase for the City’s part-time elected officials, let me refresh your memory. In 2002, the City had over $18.0 million in reserves, was in an extremely sound financial position and future prospects were good, so good that everyone on City Council, except me, voted to spend $4.2 million the very next year for Arrowhead Golf Course in 2003. 

As each of you should be very aware, the loss of the Hoover Company along with more recent revenue losses described above continue to take a toll on city finances. Reserves are a distant memory and probably will never materialize again. 

I do not think it is a coincidence that the proposed salary increase being requested for part-time elected officials is coming at the same time that the Ohio Public Employee Retirement System (OPERS) is increasing the required minimum monthly salary to $600 per month to continue to qualify for full-service credit for retirement. 

Drawing a pension for serving as a council member is an added cost to city taxpayers and probably is a total unknown to most city residents. The proposed salary increases totaling $20,100 will also result in an increase in annual pension costs borne by the taxpayers of $2,814. 

Given North Canton’s strained financial condition and dismal financial prospects into the future, I would urge this council to forgo a salary increase. Hopefully you will do your fiduciary duty and not increase the financial strain on the city and its taxpayers. 

In the alternative I would suggest that legislation be drawn up to keep a public record of attendance of council members at council meetings and furthermore limit payment for meetings not attended to two meetings per year. Absences by members at City Council meetings have mushroomed out of control and the public needs a mechanism to track attendance by their elected officials.  

The statement in the Repository story of January 23 lays out a roadmap for North Canton. “…the city has to find a way to raise revenue and cut spending by about $1 million and by significantly more money in later years.” 

Raising salaries of part-time elected officials so they can continue to qualify for retirement credit under the Ohio Personnel Retirement System is not going to put the city on a fiscally responsible path.

Remember, it is all about serving your community. Vote NO on Ordinance No. 47-13.

Thank you,
Chuck Osborne
City of North Canton