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YOUNGSTOWN McKelvey prepares for deficit



Published: Tue, April 30, 2002 @ 12:00 a.m.



A decision on layoffs will be made within weeks.

By ROGER G. SMITH

CITY HALL REPORTER

YOUNGSTOWN -- The size of the city's budget problem is coming into focus.

The city is still looking at where revenues stand so far this year, Mayor George M. McKelvey said Monday, but so far he is projecting a $2.5 million deficit for 2002.

The city will use two other primary factors besides gauging revenues before deciding how to make up the difference:

USavings from a hiring freeze; cuts to overtime, except in emergencies; and cuts to travel, except legally mandated trips.

USavings from retiring workers.

The city will consider layoffs once all those savings are known, compared with revenues, and determined how much they offset the projected deficit, McKelvey said.

A decision on layoffs will be made in the coming weeks, he added.

Retirement incentives

McKelvey doesn't expect the spending freeze to make up the difference alone since paying workers makes up close to 80 percent of the budget. That makes retirements -- and an incentive to retire that the city will soon offer -- a key, he said.

"It's all contingent upon the number of people identified in terms of retirement," McKelvey said.

If a $2.5 million deficit remains, that could cost more than 60 workers their jobs, based on a $30,000 average salary and $10,000 in benefit costs.

"We're hopeful the number won't go that high, but we're being realistic," McKelvey said.

Ignoring the problem or delaying action will only make things worse, he said, so the city is prepared to act soon.

The city can't risk falling into a fiscal watch, or worse, state oversight that leaves decisions on services to others, he said.

Reasons for squeeze

Falling tax revenues because of economic downturns locally and nationally, combined with increased wage and health insurance costs, are putting the city in the tough spot, the mayor continued.

He warned city council members a month ago when the 2002 budget was passed. He told them the budget would be reviewed weekly and action taken to avoid a deficit.

"Every decision the next 12 months is with an eye on the budget and avoiding a deficit," McKelvey said.

rgsmith@vindy.com




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