The City of Toledo is for all intents and purposes a large corporation. The problem is the corporation is out of money and the shareholders - THE CITIZENS - are not receiving any dividends.
We heard during the bailout talk related to the Big 3 auto makers, that we should allow them to fail, forcing them into bankruptcy which would EMPOWER them to re-negotiate contracts, cut the fat, and FORCE them to be more efficient. Should the same be allowed for the City of Toledo?
Take Back Toledo efforts aside, we have a Mayor/CEO who is not effective, a form of government that needs to be changed, and a council that is stuck on the same old ways. Recently an arbitrator held the City to its contract agreements with some of the labor unions while others refused to vote to pay a portion of their members' health care premiums, as little as $55.00 per month for family coverage. Could bankruptcy be the solution to a myriad of the City's problems?
The City is facing millions in deficit, a failure of basic services, engaging in improper layoffs and contract breaches, and there are few clear solutions visible in the near future. If the City were to declare bankruptcy the Federal Court would appoint a trustee who would oversee the re-organization and restructuring of the budget, EXERCISING POWER OVER THAT OF THE MAYOR.
The trustee would have the power to force re-negotiation of contracts, cease actions by the city in the private sector which are not profitable - including; the Erie St. Market, ambulance service, towing service, and mandate the sale of city property that may be available for revenue. A trustee could direct that basic services be funded first then IF AND AS NECESSARY secondary services or programs could be funded. It may even be possible for the trustee to force a change in the form of government back to a city manager style, or at a minimum, maintain an oversight function to monitor the progress of the City through the 5 year restructuring.
Tough times call for tough measures. The contracts which exist are enforceable, rightfully so, and the unions continue to hold the city hostage to concessions. The unions will not vote to carry a larger burden even though that may cost members jobs. Most importantly,the Mayor and council are stuck to the old method of make promises, raise fees, and disenfranchise businesses and taxpayers. Bankruptcy may be the solution the City needs.
TAHL
Friday, January 2, 2009
Toledo as a Corporation - Solutions From the Bailout Debate?
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2 comments:
Looking at your idea from a perspective of possibility, it is possible, Cleveland is supposedly the first City in America to declare bankruptcy back in the late 70's. Vallejo voted for bankruptcy and a recent article in Indiana asked the question of legality as far as a City there filing for bankruptcy. It would eliminate the union contracts.
From a political point of view, it's not very likely this would ever happen. Look at the political connections some of our elected officials have to unions.
Councilman Collins has pointed out several times that he thinks the city risks ending up in receivership.
I don't think we are close to that yet and given the recent bond ratings that we received, we are not in as bad of financial shape as some other cities are. The City still has options, whether they take them or not, is the question. Eventually those who have political connections to the unions are going to have to risk their wrath and stand firm when it comes to negotiations. Or we are going to have to elect more people who don't have ties to union support who are willing to make hard decisions.
Yes - Please, let them fail! Let them all fail and fall victim to free market self correction. It will be painfull, but well worth it.
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