When Simple Math Isn't Simple

There's a reason why it takes an M.B.A. to figure out government accounting in this day and age. It really doesn't work the same as it does for us at home.

Take, for example, Saturday's news release from the City of Akron listing the per-officer "cash sacrifice" cost of what the City says was it's best and final concession package offer. The members of Fraternal Order of Police Lodge 7 turned the package down by 29 votes.

Saturday's accounting listed the following; I've taken the liberty of listing what the number would be, when available with additional notes in boldface:

-Defer (put in the bank for payment later) longevity (bonus) payments of 2010 and 2011;

-Work three, non-traditional holidays in 2010 at straight time pay rate. (Officers receive 13 paid holidays/yr.);

-Take 14 hours furlough in 2010. (Most city employees have taken 32+ hours);

-Have no wage cut or increase for 2010 and 2011 (actual amount unknown; City asked for clarification on "cash sacrifice" cost per officer based on current contract terms);

-Replace $300 cash fitness payment with a free gym membership for 2011

-Reduce 2011 clothing allowance (ranges from $1200-$1500) by approximately 25 percent. (Officers uniforms are provided by the City) (Cost to each officer: $300-375 based on ranges noted by the City);

-Make minor change in mail order prescription plan

-Agree that specific non economic issues would remain before fact finder

At this point the cost to officers in the fitness payment and clothing allowance alone is $600 apiece, and that doesn't include the "cash sacrifice" impact for straight time for three holidays, a wage freeze, or 14 hours of furlough pay for the remainder of 2010.

We asked the Mayor's office to explain how it arrived at the $450 figure that would set the "cash sacrifice" for the 449 officers now on duty.

In a response today, the longevity pay deferral over two years would amount to $720,000 over two years, or about $360,000 each year. That alone is worth $801.78, on average, to each officer. There is a promise to pay the amount back in 2012 -- just as the City and F.O.P. agreed to defer the 2009 amount to 2012, which means four years of longevity pay (2012 current + deferrals) would come due in 2012.

That's a whopping minimum $1,440,000 total police longevity pay bill due in 2012 -- $360,000 for 2009, 2010, 2011 and 2012. The actual amount will fluctuate depending on each year's makeup of the workforce; less longevity and seniority, lower payments.

The response also lumps together the clothing allowance, 14 hours of furloughs, straight time instead of holiday pay for three holidays, and changes to the prescription plan into additional impact on the balance of $1.4 million the City says it would save over two years.

Perhaps the oddest twist comes regarding the impact of the $300 per officer cash fitness payment. The City doesn't consider this a loss of cash to the officers, since they would be receiving value in a free gym membership in return. The gym is the CitiCenter Athletic Center facility, which is owned and subsidized by the City and was the focus of a 2007 story by the Akron Beacon Journal (archive access only) and AkronNewsNow.com over costs of over a million dollars over the past decade. In that year City Council approved a $233,000 subsidy for the CitiCenter Athletic Center even though membership fees only brought in $90,000. The athletic facility is managed by the Akron Area YMCA.

The CitiCenter website lists the monthly cost for city, county and state members of $37.60 -- a 20% discount from the regular membership. Based on the membership cost listed for government workers, coverage of all 449 police officers at the government rate would be $16,882.40 monthly, or $202,588.80 annually ($37.60 monthly x 449 officers x 12 months). The fitness payment now costs the City $134,7000 annually ($300 cash payment x 449 officers).

A spokesman for the Mayor writes the City has an arrangement with Medical Mutual that provides for lower health care premiums based on participation at the CitiCenter gym, noting that if police officers join it will lower costs.

So the "simple" math: $1,400,000 in savings over two years divided by 449 officers works out to $1,559.02 each year over the period, not $450 as reported by the City on Saturday, according to the City's own numbers.

We should note some of the City's concession package breaks no new ground; the FOP agreed to concession terms in 2009 that included deferral of 2009 longevity bonus to 2012 as well as working three holidays -- Columbus Day, Veteran's Day and the Friday after Thanksgiving -- for straight time rather than overtime at a time-and-a-half rate.

Around this time last year it was Akron firefighters on the grill rather than police. FOP members approved concessions by a 94% margin (399-27) while members of the AFD took layoffs rather than the concession package proposed by the City. Those firefighters were called back earlier this year when Akron was able to secure federal funding. The firefighters union appealed to the Akron Civil Service Commission, which rejected their appeal and noted the layoffs could have been avoided had firefighters agreed to concessions.

This year it's the F.O.P. essentially playing chicken with the City, but it won't be the Civil Service Commission ruling that awaits. It's the ruling of a fact-finder, who's mission was triggered when the City couldn't convince the F.O.P. to take a concession package earlier this year during contract negotiations. Critics of the Plusquellic Administration assume the report will find against City Hall, but it is important to note F.O.P. president Paul Hlynsky has repeated said the findings may very well come in to the favor of the Mayor's position.

There's been plenty of drama distraction the past few months in following this story. There was the document released by the Mayor's office that threatened more than 90 police layoffs in light of a $4 million dollar projected deficit and protests from the Administration there were no other places to cut. But weeks later, that number shrank to 49 -- 40 layoffs and nine demotions -- after Police Chief Gus Hall was able to shift general fund spending to grants.

Then came the membership vote when the bargaining committee agreed to present the package to Akron police; it flunked by a relatively slim 29-votes, especially slim when considering these same officers approved concessions last year by a 94% margin. Before the ink was dry on the results, the Mayor suggested a political wrinkle that community leaders be allowed to observe the negotiating process.

In political circles this is clearly a tactic designed to position your opponent; who is in the room is a function of agreement by both parties, not the arbitrary wishes of one side over the other. The City points to an F.O.P. guest on hand last week, but fails to mention the "guest" was in fact a vice-president of the union and someone with a direct stake in the negotiations. Community leaders Rev. Ron Fowler and Judge Marvin Shapiro, while honorable men, are not parties to the negotiations. It was within the rights of the F.O.P. to refuse to accept the condition of meeting imposed by City Hall to include Fowler and Shapiro, just as the City would have been within it's rights to refuse to allow the F.O.P. first vice-president permission to attend.

The Mayor is correct when pointing out there's less money in the City budget to do what the City needs to do. Something has to go, and in a services-industry budget like government that "something" usually means someone. He clearly telegraphed the punch early, noting layoffs -- just like last year -- were on the line. The F.O.P. is correct in working within the parameters of the collective bargaining system, and proved last year members were willing to absorb some short-term hurt to help. But what hasn't helped is losing focus on meeting the growing deficit, made even harder by a call to base the budget on concessions that weren't agreed on by both parties. Just search the word "concessions" on AkronNewsNow.com and put the last year in context.

Lost in the swirl of soap opera on High Street remains what actions the City will take to avert a projected $4 million dollar budget deficit, and whether the political posturing of tying a funding proposal involving breaking the promise to use Issue 10 for purposes other than schools will cost voters the chance to decide whether they feel it is enough of a worthwhile investment to change the terms of their approval in 2003 of the school construction tax. That language -- while politically crafty -- may come back to outfox the Administration and City Council by tying their own hands in an attempt to position the F.O.P. rather than address the threat of an out-of-whack budget.

The decision of the City to move forward with a negotiating strategy that called into play a fact-finder has been costly. The name-calling by both sides has built an atmosphere of distrust and enmity. Tying the budget deficit to the police contract, neither side breaking out issues of agreement, the war of numbers that don't seem to add up...all bring to mind the popular scene from the movie "Dave", where accountant Charles Grodin is asked by his president-impostor friend Kevin Kline to figure out the federal budget.

They do so over a late-night meal.



If only it was a simple as a couple beers and sandwiches.