TOLEDO, Ohio — The city of Toledo's budget for 2023 raises red flags about long-term financial stability, council member Katie Moline said.
Moline, a certified public accountant, said she has been speaking with Toledo's Finance Department since the new year and walked away from the conversations with numerous concerns.
The most worrisome part of the budget, she said, is that the city has earmarked at least $20 million American Rescue Plan dollars to reimburse the general fund. But, the city has pulled zero dollars of that money from its designated Local Fiscal Recovery Fund.
The money is not properly designated, which creates an unbalanced budget that goes against the city charter, Moline said.
Additionally, the budget's use of federal funds, capital improvement funds and rainy day money to balance the books makes the city reliant on money it either won't have in a few years, can't budget for or has a limited supply of.
In total, Moline is concerned about approximately $47 million.
Moline said this spending has created a structural deficit: the city of Toledo is frivolously spending more money than it actually has on long-term programs, without adjusting financial projections for inflation, causing even higher prices on expenditures than estimated.
This issue was observed recently when the residential roads improvement project for the year increased by 12.5% more than predicted, due to construction and supplies shooting up after budget considerations had been completed.
Moline said these budgetary issues are major errors. If Toledo's Finance Department doesn't make the hard decisions and pull back on spending now, it will be forced to make some unsavory cuts in the following years.
"I don't want to see us as a city, as a city council, as a citizen of Toledo, to be put in that position where we have to make incredibly difficult choices where we're considering having layoffs of fire or police," or maintaining a park, she said. "We need to be vigilant now so we don't have those painful, painful discussions down the road."
So what is the best preventative measure for this? The city's financial officers need to rewrite the 2023 budget, Moline said. If they don't, she will pursue further action.
Moline said if the city's finance administration doesn't make serious adjustments to this year's budget soon, she will urge council to reject the budget and demand a balanced, revised budget be resubmitted before the March 31 deadline.
In response to Moline, a city representative gave WTOL 11 the following statement:
"The ARPA dollars are being used for their intended purpose- to invest in things our city needs and our residents want.
The longterm investment strategy will continue to build a city where residents want to live, work and play. Since 2018 the City has not relied on a CIP transfer of money with the exception of the COVID year of 2020."