Despite steep revenue loss, Youngstown ends year in black

By Harold Gwin

YOUNGSTOWN — The city will end 2009 in the black, despite the fact that its income tax revenue fell well short of projections.

David Bozanich, city director of finance, told city council Wednesday that revenue from the city’s 2.75 percent income tax came in at $40.4 million. The city had anticipated $42.9 million, he said.

Youngstown had prepared for a drop in that revenue when council enacted the 2009 budget in March.

The city took in $46.4 million in 2008 and budgeted an 8 percent decrease for 2009. However, the decrease amounted to 13 percent, Bozanich said.

That $2.5 million shortfall “created a lot of challenges,” he told council as it prepared to pass a 2009 budget reconciliation ordinance.

Despite that, the city will end the year with a $300,000 budget balance, he said.

The income-tax shortfall dropped the $140.6 million total projected revenue to $138 million, and the difference will be covered by a combination of employee buyout savings, an unanticipated payment from First Energy and the city essentially borrowing from itself.

Bozanich said fire department buyouts involving 29 people saved Youngstown $500,000 this year, and that level of savings will continue for years as those firefighters are being replaced with personnel at a savings of 40 to 50 percent per firefighter.

First Energy sent the city a check for $630,000 to cover an extension of its aggregation program agreement, he said.

The city will tap $350,000 available in its debt service fund and take $1 million from its self-funded worker compensation fund, Bozanich said.

The latter will have to be repaid at a later time as claims accrue, he said.

It was a big accomplishment to end 2009 in the black, Bozanich told council, adding, “2010’s going to be very challenging.”

Councilwoman Annie Gillam, D-1st, asked if any city departments cooperated in terms of returning any unused funds.

The departments controlled by the mayor have done very well, Bozanich replied.

Mayor Jay Williams said the challenge continues to be in the departments outside the scope of his office, referring to the municipal courts and the health department and citing a specific battle with the courts.

He cautioned that the unresolved issue over improved municipal court facilities at a cost projected at about $8 million raises concerns about maintaining the city’s fiscal viability. The matter remains in litigation, he said.