Sept. 22--MIDDLETOWN -- The city anticipates it will need to cut at least $1 million from its budget within the next two years, and that could involve job cuts, according to the city manager.
City Manager Judy Gilleland said it's "too soon" to know where potential layoffs could happen, or if they will happen through attrition -- which is the process of eliminating positions that are not currently occupied by an employee. And when asked if job cuts would be limited to 2014 or 2015, she said, "both potentially."
"In the next year or two we need to eliminate $1 million to $2 million from our expenditures," Gilleland said. "That likely will involve reduction of police, fire and other employees, which is always a very difficult process, however, very necessary in terms of making our expenditures match revenues."
City Council next month will begin its 2014 budget discussions. A draft copy of the budget won't be ready until later this month, or even the first week of October, but if the city does eliminate the minimum anticipated cut, $1 million, that could mean a 2014 expenditure budget of $28.7 million. The 2013 expenditure budget was approved at $29.7 million.
But budget cuts likely won't be limited to 2014, Gilleland said.
She said she didn't know yet the ratio of how much will be cut from the 2014 budget and the 2015 budget, but she said revenues aren't shaping up as projected which is part of the reason for the anticipated cuts. Regardless, "at least $1 million" needs to be cut from the city's budget over the course of the next two years, she said.
"As a whole our revenues have stabilized, however, our economy is not rebounding as quickly as we thought it might," Gilleland said.
The budget cuts would come on the heels of voters approving in August 2012 renewing the Public Safety Levy -- a 0.25 percent income tax renewal to supplement the police and fire budgets by $3 million -- and making it permanent.
And though it may not have an impact on the budget, the city's credit rating, along with several other municipalities and townships in the Cincinnati region, was downgraded. It went from Aa2, the third-highest rating on Moody's Investors Service's 21-level scale, to Aa2. The agency cited concerns about Middletown's "deteriorating" tax base and demographic profile, reliance on economically sensitive income tax receipts for the majority of its general fund revenues and the nearly $1 million loan from the general fund to finance Weatherwax Golf Course.
Finance Director Michelle Greis said the ratings drop would have a "minimal" impact, saying it would cost the city an extra nickle for every $1,000 borrowed moving forward.
IAFF Local 336 Vice President Chris Klug said the fire union was notified of the budget issues by fire Chief Steve Botts and the fire department needs to cut just more than $400,000 between 2014 and 2015. The fire department's 2013 expenditure budget is just more than $9.2 million, and pays for 78 uniformed personnel and one administrative assistant.
The fire department will lose next September a $1 million SAFER grant, a two-year federal staffing grant for the fire department, which resulted in hiring six firefighters.
"It's devastating for these guys (that were hired with the grant)," said Klug. "(Some of) these guys were laid off before and got brought back with the SAFER grant and they're hearing it again."
He said two firefighters had already left the department to join the Cincinnati Fire Department.
Klug said he believes that if firefighters are cut, then the minimum staffing levels could drop by three. The current minimum levels are 16 firefighters on duty per shift.
"And that would be that much more of a lag for us to rely on mutual aid," said Klug. "Middletown is running the most efficiently that it can. Cost per run, cost per citizen, we're the best in the area. And if you cut staff, the department will no longer be the best."