YOUNGSTOWN City aims to erase deficit

The finance director expects to eliminate the deficit by midyear.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- Plenty of uncertainties surround the city's financial condition as the calendar page turns.
One major issue that isn't drawing concern, however, is more layoffs. Finance Director David Bozanich doesn't expect the city to lay off any more workers in the coming year.
Instead, the aim is erasing the projected year-end $2.5 million deficit and stabilizing finances going into 2004, he said.
"The goal is to shore up the city's financials as best as possible," Bozanich said. "It's a work-out year, a work-out budget."
That means addressing issues that otherwise would cause another deficit.
Items garnering attention
Bozanich said he will spend the next few weeks on three main items:
* Analyzing the projected deficit.
* Projecting revenues for 2003 and into 2004.
* Reviewing all spending. The review will focus on the largest spending items where major savings are possible, he said.
Bozanich expects to have a budget ready for city council approval by mid-February.
Full-year budgets in recent years haven't been ready until the end of March.
An earlier budget will let department heads get started faster on projects and work on meeting financial goals sooner. Most city officials already agree on what must be done so there is no reason to wait, Bozanich said.
Cuts
He expects to eliminate the 2002 deficit by midyear by virtue of the cuts already made.
The city has 95 fewer workers as a result of summer layoffs and buyouts. That total includes the November return of two dozen laid off firefighters or police officers.
The city likely will refill about 20 of the remaining vacancies in 2003 out of necessity, Bozanich said. The city will replace retiring police and firefighters, too.
The city will save about $2.5 million in 2003 if the worker reduction stays at about 70 compared to pre-layoff and pre-buyout levels, he said.
City leaders will revisit the entire budget once they eliminate the deficit, he said.
Until then, talks will wait on two items:
* Recalling the remaining laid-off workers.
* Adding police officers or firefighters. Chiefs in those departments suggest they need to add personnel.
The city will hire three firefighters shortly to reduce overtime costs, Bozanich said.
Improvements budget
The capital improvement budget for 2003 needs funding before adding or returning most other workers, however, he said. The money will pay for items such as matching government grants, economic development and demolition.
The deficit caused the city to cover park and street department expenses with 2002 capital funds.
The city will consider refilling other jobs after dedicating the capital funding and seeing finances stabilize, Bozanich said.
That means hiring more police or firefighters will wait until at least year's end. The city wants to start right-sizing the police and fire departments, as Bozanich calls it, in late 2003 or early 2004.
Tax revenue
Bozanich doesn't expect income tax receipts to rise much beyond the new revenue generated by the half-percent increase for police and fire.
The new tax is expected to generate about $6 million this year, he said. Ultimately, the tax should generate about $7 million annually once the city works out collection glitches, he said. Out-of-town companies don't always withhold enough after a tax increase, he said.
Bozanich wants to be conservative with the estimate.
He would be glad to see income tax revenue rise by 2 percent next year, minus the amount generated by the new half-percent. He won't project more than a 1 percent rise, however.
The good news is that it appears the city contained its costs and is stable, even if revenue otherwise is flat, Bozanich said.
Nonetheless, he isn't seeing the overall economic turn needed to reverse the city's fortune.
rgsmith@vindy.com