Toledo staff report modest revenue gains but flag withholding, medical-cost pressures

Director of Finance Melanie Campbell and Tax Commissioner John Zavisha told the Finance, Debt and Budget Oversight Committee on Tuesday that Toledo’s year-to-date revenues exceed last year’s by roughly $3.5 million, or about 4.3 percent, but that several categories merit monitoring.

Campbell said the general fund is 41 percent through the fiscal year and that collections as a percentage of budget stood at 36.3 percent through May. "Collections as a percentage of budget are at 36.3," Campbell said. She also noted that some intergovernmental and other payments are scheduled later in the year and that transfers from the capital improvement program (CIP) typically occur at year end.

John Zavisha, the city’s tax commissioner, reviewed income-tax detail, saying withholding — which he described as "a huge category for us" and usually "slightly more than 75% of our total revenue collection" — was down just under $400,000 for May and about $440,000 year to date, or negative 0.7 percent. He said business net profits posted a strong month, up nearly $3,000,000 in May and about $3,600,000 year to date, driven largely by a small number of large taxpayers. "We just sort of watch the business net profits," Zavisha said, noting those receipts are more dependent on estimated payments.

The report showed individual net profits for May were down just over $500,000 for the month but up $358,000 for the year; refunds issued so far this year total just under $600,000. Zavisha said the city’s change to a lockbox arrangement earlier in the filing season had shifted some receipts into earlier months, complicating month-to-month comparisons.

On expenditures, Campbell said overall spending through May was 42.6 percent of the 2025 budget, either committed or expended. A labor-category variance is largely attributable to the Toledo Police Patrol collective bargaining agreement settled in April that included retroactive pay to April 2024; that payroll posted in May and will be addressed in a planned midyear budget adjustment. Campbell said medical costs are running ahead of prior-year levels, with a year-to-date variance of $882,000 driven primarily by prescription drug costs.

Council members asked about joint economic development area (JEDD) payments, and Campbell said staff would check whether any entities were behind on payments. She also noted the city is targeting an August council meeting for midyear budget adjustments and that departments should submit requests to finance by mid‑July; Campbell emphasized that requests should generally be for adjustments within the existing budget rather than new ongoing spending or positions.

Campbell said the city’s ARPA (American Rescue Plan Act) awards are obligated and that there remain $34,000,000 in expenditures to be made from the ARPA program; the transcript did not specify the remaining payment schedule. The committee heard that the tax office and IRS-related activities were generally on schedule.

Chairman Sarantu relayed a constituent compliment about tax-department staff: "Darnell ... was very professional, very helpful," he said, after a resident told the committee that Darnell helped them refile two years of missed returns and obtain a refund.

The packet also included full-fund revenue and expenditure reports, the CIP report and the ARPA report; staff offered to answer follow-up questions by council members. The committee recessed after hearing the finance report and moved to the city auditor’s presentation on an internal audit plan.