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Published: Saturday, 8/14/2004

City says deficit could hit $17.5 million

BY TOM TROY
BLADE STAFF WRITER

The city of Toledo is projecting a $3.5 million deficit this year in its $230 million general fund budget - $1 million more than the estimate of red ink just a month ago, top finance officials said yesterday.

Tom Crothers, the city's acting finance director, said the $3.5 million deficit would be in addition to the $14 million deficit already estimated for 2005, for a total of $17.5 million that will have to be cut in 2005.

He and Chief of Staff Jay Black said each of the city's directors has been given a budget-cutting target. Police and fire services make up about 71 percent of general fund spending, but they have been largely spared from the cuts of the last three years.

The news conference was scheduled to respond to media questions about rumors of layoffs planned for police, fire, and trash-collection services.

"We are going through the budget evaluation process," Mr. Black said. "But everything is on the table at this point, and we may in fact have some layoffs."

The mayor and City Council have laid off a small number of employees during the last three years while eliminating dozens of vacant city positions.

Councilman George Sarantou, finance committee chairman, said no specific layoffs have been proposed to him.

"If the revenue continues to decrease, we're ready to lay off," he said, though he stressed that cuts in police, fire, and trash collection would be a last resort.

Mr. Sarantou said city employment has declined from nearly 4,000 employees 20 years ago to about 2,900 today.

City officials were shocked by an abrupt shortfall of $2.2 million in the month of June, compared to the same month a year ago. Despite an improvement in July, Mr. Crothers said analysts now are projecting a total deficit of $3.5 million through the end of the year. The city already has dealt with a $2.5 million shortfall this year in June.

Gregg Harris, president of the Toledo Police Patrolman's Association, said the $3.5 million

figure could change depending on what happens the rest of the year.

He said if the police department has to cut its budget by $1.3 million, Police Chief Mike Navarre and union officials would sit down and make suggestions on what to do.

Mr. Harris said it is "ridiculous to suggest there's going to be 50 or 100 [layoffs] or whatever."

Mr. Sarantou said one alternative being studied to generate revenue is for the city to open a police tow lot. Currently, the city contracts with towing companies to haul away cars involved in accidents or that have been abandoned. He said that conversion could generate up to $1 million in revenue for the city.

He said he's convinced the economy is turning around, but said it's taking so long because of the city's dependence on manufacturing.

Blade Staff Writer Christina Hall contributed to this report.

Contact Tom Troy at:

tomtroy@theblade.com

or 419-724-6058.



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