Warren officials, workers looking at ways to eliminate budget deficit
By Ed Runyan
The mayor says the city has ‘lost all its manufacturing base.’
WARREN — The message shared with city employees in recent days was that additional job losses in the private sector and rising insurance costs have produced another $1.6 million budget deficit.
Now, city officials will meet with workers a second time to discuss and negotiate what to do about it.
“Everything’s on the table,” Mayor Michael O’Brien said of the additional cuts that will be needed in the coming weeks to reduce spending for the third time since December.
Among those options are reductions in pay and benefits and additional layoffs, he said.
Auditor David Griffing showed city council’s Finance Committee the same overhead presentation Tuesday that he gave workers, showing not only the reasons for the most recent deficit, but also the adjustments that were made in December and February, and a projection for another $2.8 million shortfall in 2010.
“We’re trying to keep them [workers] up to date, Griffing said.
Though rumors have begun to circulate around the city a second time on the number of jobs that might be lost or the type of givebacks the city would demand, O’Brien and Griffing said no decision has been made.
“It depends on what happens with the unions,” O’Brien said.
The mayor acknowledged a reduction in pay and benefits is the method being used across the country to cope with the economic downturn, but he said he doesn’t know if that is how the latest deficit will be eliminated.
Council members agreed with Griffing that the deficit must be eliminated sooner rather than later.
On March 1, Griffing learned the city’s self-insured health-care plan through Anthem Blue Cross Blue Shield will rise $1 million in 2009, a 21.5 percent increase over 2008. Of that amount, $500,000 will have to come from the city’s general fund. The other $500,000 will come from departments that pay their own insurance costs.
Griffing said he was estimating that health care would increase 8 percent as in recent years. A spike in claims appears to be responsible for the increased cost, Griffing said.
Added to the health-care increase is another $1.1 million drop in city income tax receipts resulting from additional layoffs at the Severstal steel mill, Delphi Packard, General Electric, Thomas Steel, Leeds and Concord Steel, Griffing said.
O’Brien says the city’s once-powerful manufacturing facilities have nearly come to a halt.
“We’ve lost all of our manufacturing base,” the mayor said.
The most recent forecast of 2009 revenue — $26.5 million — is the second revision since council approved its 2009 budget in December.
It anticipated revenues of $28.7 million then, but a drop in interest rates and additional job losses caused council to revise its revenue projection to $27.6 million in February.
Federal stimulus money could help the city bring back laid-off employees or keep some employees on the job, Griffing said, but it’s still too soon to tell when that assistance may become available or how much it will provide.
The city laid off 20 police officers, 11 firefighters and eight other city employees effective Jan. 1 as part of its $1.2 million in cuts.
In February, the city administration eliminated another $1 million by renegotiating its Trumbull County Jail contract downward by $211,000 and cutting $550,000 across departments, among other cost-cutting moves.
It increased revenue by $350,000 by getting $100,000 from Warren Municipal Court as well as from other funding streams.