By Stephanie Warsmith
The Akron Beacon Journal
AKRON, Ohio — Akron only saved about $21,000 by laying off 38 firefighters, Phil Gauer, president of the fire union, testified Thursday.
The city saved on salaries and benefits, but had to pay for accumulated vacation and comp time and will have to cover unemployment compensation, Gauer said during a Civil Service Commission hearing.
Finance Director Diane Miller-Dawson disputed Gauer’s calculations, as well as an analysis by an accountant the union hired that says Akron could have ended the year with a surplus — without laying off firefighters.
“No one wants to go through the stress of all this,” she said of the layoffs. “We would not have done them if we could have found another way.”
The commission must decide if Akron was justified in its decision to lay off firefighters and 53 other city employees Oct. 1 to bridge a projected budget deficit of as much as $8 million by the end of the year.
Attorneys for the union and city still will depose Councilwoman Tina Merlitti, who heads council’s finance committee, and will also give closing arguments to the commission.
Thirty-seven firefighters and 10 other city employees appealed their layoffs. One fireman, who had just returned from military deployment, did not appeal.
Many of the laid-off firefighters again attended Thursday’s hearing — the continuation of proceedings that began last week.
The commission will announce its decision on the first two layoff appeals at its Dec. 1 meeting. A ruling isn’t expected on the firefighters’ appeals, which were consolidated into one case, until a later meeting.
In the event of a tie by the two-member commission, the ruling would side with the appellants. In the firefighters’ case, that means the firefighters would prevail.
Thursday’s hearing began with attorneys questioning Frank Suponcic, an accountant the fire union hired to go over Akron’s books. He said Akron began the year with a surplus and spent more than it made as the year progressed.
“But that doesn’t necessarily mean the city will end the year with a deficit,” he said.
Suponcic said Akron had a deficit of about $5.4 million after the first six months of this year. That projects to a $10.8 million shortfall by the end of the year.
But, he said, it could have been avoided by transferring money from the income tax collection and joint economic development district (JEDD) funds into the general fund. He said Akron then could have ended the year with a surplus of at least $2 million — without the firefighter layoffs.
Suponcic said the surplus would have topped $4 million with the addition of $2.2 million the city received from FirstEnergy Solutions, a subsidiary ofFirstEnergy Corp., for a longer electric aggregation agreement. He said his figures don’t include savings the city achieved through concessions from other unions to avoid layoffs or with buyouts and other cuts that kicked in after Aug. 31.
Assistant Law Director Tammy Kalail asked Suponcic if he knew Akron’s rationale for waiting until the end of the year to transfer money from the income tax collection and JEDD funds into the general fund.
Suponcic said he understands the city waits to transfer funds from the JEDD fund because of when debt payments come due. He said he doesn’t understand why more couldn’t have been transferred out of the income tax collection fund sooner. He said Akron transfers money out of the account monthly.
Kalail asked Suponcic how the city could know by mid-year how much it could afford to transfer from other funds to the general fund.
“You know revenues are going down,” she said. “How could you make that projection with any degree of certainty?”
Suponcic said the city could have made its “best estimate.”
“It seems awfully risky to rely on a projection when all of your other projections have been off,” Kalail said.
“No projection is a bull’s-eye,” Suponcic said.
Gauer, an Akron firefighter for 24 years, testified next, including discussing his analysis that showed Akron only saved $20,831 from the firefighter layoffs.
Miller-Dawson disagreed with Gauer’s calculations. She said he incorrectly calculated health-insurance expenses, didn’t include the city’s pension contributions and mistakenly added in fitness and uniform allowances paid at the beginning of the year. She also said the city hasn’t made any unemployment payments to the firefighters, though she said that likely will begin by the end of the year.
Miller-Dawson acknowledged that Akron had to pay the firefighters what they were owed for vacations ($74,693) and comp time ($215,210). But, she said, this is money the city knows is owed to employees and must be prepared to pay out at any time.
“That’s why we keep a fund balance,” she said.
Miller-Dawson said Akron saved about $560,000 in salaries and benefits through the end of this year with the firefighter layoffs. She said the savings would grow to about $3 million, if the firefighters were off the books next year.
Stimulus funds
Akron has not sent its application for federal stimulus funds to bring back 38 laid-off firefighters.
Fire Chief Larry Bunner said the department has asked several questions regarding the Staffing for Adequate Fire and Emergency Response (SAFER) funds but has not gotten responses.
The application deadline is Dec. 18. Bunner said there is no advantage to sending the application early.
The grants are expected to be highly competitive.
Copyright 2009 Akron Beacon Journal