YOUNGSTOWN Incentives bring some savings, but city still projects a deficit

The projected deficit means 40 or more layoffs if revenues don't improve.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- The city has 45 workers taking a $10,000 incentive to resign or retire.
That's not enough, however, to stave off layoffs if revenues don't turn around.
The city will save about $800,000 with the incentive.
Paying out the incentives will cost $450,000. The city will save $1.25 million in salaries and benefits, however, said Finance Director Barbara Burtner. She is among those who are taking the money and leaving.
She and Mayor George M. Mc- Kelvey explained the city's situation Tuesday to council's finance committee.
The city now is projecting a $1.7 million deficit after subtracting the savings that the incentive generates. That means about 40 layoffs based on an average $40,000 salary. The city also must pay unemployment to laid off workers, which could raise that number.
Predicting revenue
Those are worst case numbers, if the trend of declining revenue doesn't reverse. Some years income tax revenue goes up in the second half of the year, sometimes it doesn't, McKelvey said. That's the ambiguity of municipal budgets, he said.
"It's very difficult to predict which way it's going to go," McKelvey said.
McKelvey said he intends to leave every vacant job unfilled that he can. For example, one of his three staffers, a secretary, has left and won't be replaced.
A few of the 45 positions might have to be refilled if they are critical -- like the finance director -- or are required by a union contract, he said.
In those cases, McKelvey said he will try to promote people in-house and leave their lower-paid jobs vacant to realize at least some cost savings.
Reducing salary and benefit costs, which make up about 80 percent of the city's budget, is the only way to manage the deficit, the mayor said.
The city will make the layoffs needed to end 2002 without a deficit, he said. Those decisions are expected to be made in July.
The city will revisit its 2003 budget situation in January, McKelvey said.
Burtner has said costs will go up in 2003. The city could face a $3 million or more deficit for that year if tax revenues don't rebound, she said.
Arena spending
The finance committee also talked about a $62,350 payment the city recently made to Benesch, Friedlander, Coplan & amp; Aronoff of Cleveland for legal services. The firm worked for the defunct Youngstown Civic Center Development Corporation, or arena board.
That payment represents charges incurred before the city cut off arena board spending in November. There is also roughly $13,500 in a bill submitted for work after that date, which is still being reviewed, said Law Director John McNally IV.
rgsmith@vindy.com