A fiscal watch means Hamilton County's second-largest city will get free technical and support services from the Ohio Auditor's Office, but no money.

Norwood's financial problems aren't dire enough to qualify for fiscal emergency status, which would have given the city access to state loans and allowed the state a stronger voice in the city's economic recovery plan.

But Norwood officials said Thursday that employee layoffs and delayed employee paychecks remain a possibility. Norwood will make its $375,000 payroll today with $15,000 to spare, said City Treasurer Tim Molony.

Mayor Tom Williams has asked the state to evaluate Norwood's operations for efficiency and effectiveness, a process that could take two months. A group of Norwood officials then will recommend to City Council a plan that enables the city to end the year with a balanced budget.

That plan could include layoffs, service cutbacks and fee and tax increases.

"We'll look at every way to reduce our costs," Williams said. "It will make some people happy and some people not so happy. It's not going to be easy, but we'll make it."

Norwood, which has 21,675 residents, is one of six communities in Ohio - including Lockland - on fiscal watch. Fifteen communities are on fiscal emergency, including Monroe in Butler County and Corwin in Warren County.

Despite the benefits from an enormous amount of commercial and office development over the past 15 years, Norwood will have a deficit of $1.5 million at the end of the year, according to a recent state audit. That's a more optimistic outlook than Norwood anticipated. Norwood had predicted a deficit of $2.6 million.

The lower deficit estimate is the result of deferring $918,000 in debts to next year's budget, receiving $370,000 more in earnings tax than expected and making other financial adjustments.

Councilman Will DeLuca said he's disappointed that Norwood won't be receiving any state financial assistance. He criticized state regulations that requires communities to miss payrolls or bill payments by 30 days or have deficits that are one/sixth of their general fund budgets in order to be in fiscal emergency and qualify for special state loans.

"It doesn't make sense to me," DeLuca said. "We're being told that a worse-case scenario has to happen before we can get financial help. Why not give us financial help now so we don't hit a brick wall?"

But Molony said Norwood is better off with a lower deficit estimate and no state fiscal emergency.

Susan Knox, secretary for a group called Citizens for a Better Norwood, said she's glad the city's deficit isn't as high as had been predicted.

She said she hopes the city makes the necessary cutbacks before instituting a proposed trash collection fee.

"We look forward to the beginning of a new process toward making the corrections the city needs to make," Knox said.

E-mail skemme@enquirer.com