City fights threat of deficit

By David Skolnick

Further layoffs are possible.

YOUNGSTOWN — With the city’s finances in worse shape than thought just one week ago, deeper cuts are needed.

That could mean increasing the previous projection of as many as 60 city workers’ losing their jobs by July 1.

“There’s always the possibility of further layoffs,” said city Finance Director David Bozanich.

It all depends upon the economy, which is on the downswing, he said.

A re-examination of the city’s 2.75-percent income tax collection projections for the rest of this year shows the total will probably be about $1 million less than last week’s estimate of $44 million.

Also, Bozanich said he’s unsure if some one-shot property sales of about $2 million expected to occur this year will materialize. The soft economy makes this a bad time for companies to purchase city property, Bozanich said.

With those problems, the proposed 2008 general fund budget, which was projected just a week ago to finish this year with a $2,997 surplus is now projected to have a $3,035,704 deficit by year’s end.

If no cuts are made, that deficit would rise to about $6 million by Dec. 31, 2009, Bozanich said.

But city officials plan to do all they can to reduce and hopefully eliminate that projected deficit, the finance director added.

City council will vote today on the 2008 budget with the $2,997 surplus. But its members plan to make deep cuts and approve a revised budget in about 60 days.

“The intent of this council is to not lay off a single person,” said Councilwoman Carol Rimedio-Righetti, D-4th and chairwoman of the finance committee.

But council members didn’t hear anything at a Tuesday meeting that would halt the layoffs.

Council and finance department officials met with Police Chief Jimmy Hughes and Fire Chief John O’Neill to discuss budget cuts.

The police department needs to make about $1.25 million in cuts by July 1. The fire department needs to reduce its budget by $750,000 by that date.

The two departments make up 62 percent of the city’s general fund budget with most of that money for employees’ salary and benefits, Bozanich said.

Other departments receiving money from the general fund are to cut $1 million by July 1, he said.

Bozanich, Hughes and O’Neill said small reductions can be made, but nothing that would result in a significant savings to the city, except cutting positions.

The proposed 2008 fire budget is only a bit more than it was last year, primarily to pay for increased wages and benefits. Bozanich and Kyle Miasek, deputy finance director, praised O’Neill for his efficient handling of his department’s budget.

Council members asked Hughes and Detective Sgt. William Blanchard, the department’s fiscal officer, about cuts to the police fuel budget of $560,000 and whether overtime, budgeted at $1.5 million (with at least $300,000 of it offset by federal funding), could be reduced.

Another suggestion was to eliminate the use of some take-home vehicles for officers.

When asked how many officers take home vehicles, Hughes said he didn’t know. Miasek said the number was 77. Hughes said he’d consider all the options.

Eliminating 60 jobs would save the city about $3.9 million annually in 2009, Bozanich said.

That savings would be about $975,000 this year if the layoffs took place July 1. That’s because it’s for only half a year and the city would have to pay about half of the former employees’ salary in unemployment benefits.

As for the remaining $2 million or so shortfall, Bozanich said the city would constantly monitor its finances to keep spending in check and perhaps some of the one-shot sales would materialize this year.

If necessary, additional job cuts would have to be considered, he said. Bozanich didn’t offer any other suggestions to make up that money.

skolnick@vindy.com