By Michael D. Clark
The Cincinnati Enquirer

MIDDLETOWN - City leaders plan to take a closer look at a looming budget problem, one they describe as serious but not immediately critical.

City Council members held a public meeting over the weekend to discuss the city's $2 million projected deficit. They heard possible solutions - including raising revenue-generating fees, and a preliminary review of personnel cuts among the city's 460 employees - to balance its $112 million operating budget.

But City Manager Ron Olson and Mayor David Schiavone stressed that layoffs were not imminent or likely in 2003, and that months more of public talks were necessary before any final decisions would be made about job cuts in 2004.

"It depends on how aggressive we want to get with generating more revenue," said Mr. Schiavone.

Council agreed that cost savings were preferred.

Councilman Robert Wells pointed out that while systematic planning for balancing the budget is the way to go, one of the major causes of the city's shortfall - the lagging national economy - remains unpredictable.

"The unknown factor is how long the recession will go on," Mr. Wells said.

Mr. Olson suggested the council consider raising jail, fire run and ambulance run fees, which are lower than in most cities of similar size.

He proposed that ambulance fees, which come to more than $400,000 annually and are now channeled directly into a city savings fund for a new fire station, be shifted for the foreseeable future to the general operating fund to help offset the projected $2 million deficit. The fund holds about $1 million. He did not, however, endorse tapping into the fire station money already collected.

A budget plan will be completed by mid-summer, officials said.

E-mail mclark@enquirer.com