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Approximately a dozen city employees could lose their jobs next year if revenue projections are accurate.

City council last night by 4-0 vote approved a $20.3 million budget that holds the line on property and wage taxes. Councilors Loretta Diggs, Darryl Segina and Paul Shelly Jr. were absent due to illness.

But the budget was balanced only because councilors agreed to drain $1 million from the city's surplus, or "fund balance," which runs McKeesport's savings account essentially to zero.

Officials are hoping that enough employees accept early retirement or voluntary layoffs to avoid mandatory furloughs.

"The economy has only made a difficult situation more difficult," Mayor Jim Brewster said. "There's apparently money available to bail out companies that have really been mismanaged, but there is no money available for communities like McKeesport or Pittsburgh or Duquesne or Clairton."

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City officials declined to say how many employees could be let go. An estimate presented to council by City Administrator Dennis Pittman had the numbers blacked out.

Pittman said later the figures were preliminary and that officials decided they didn't want to unnecessarily alarm employees --- or give them false hope.

But Brewster, Pittman and others said the city needs to cut $1 million from its expenses before 2010. With most of the city's 160 employees making annual salaries in the range of $30,000 to $50,000, plus benefits, chopping $1 million from the payroll would mean that more than 10 employees have to be eliminated.

Those staff reductions would come in addition to 10 vacant positions that are not being filled. Officials said last night they hope any layoffs would be temporary.

"These changes will be transparent to the public, and we will continue to be very business-friendly," said Brewster, adding that the city's "most valuable resource" was its employees.

"We recognize that good employees are hard to find, and that we have a lot of them," he said.

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Council President Regis McLaughlin last night said he would be donating part of his salary back to the city treasury, and encouraged other councilors to do the same. But the gesture is symbolic at best; council members are paid only $4,000 per year.

Last night's sobering news comes one month after Uniontown announced that it would temporarily lay off 41 employees and raise taxes 5.5 mills.

In McKeesport's case, Brewster said one serious problem is a decline in sewerage payments, trash fees and taxes. Delinquent sewerage bills alone amount to nearly $746,000, the mayor said.

"People for whatever reason are not paying government," Brewster said, promising that the city would become "more aggressive" in chasing deadbeats.

"Frankly, one of the things I don't think we've done as good of a job at is collection of revenue," he said. "We have residents who are paying for cell phones for three of their kids, but aren't paying their sewerage bills. We don't want to put people 'on the spot.' I think we should."

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Brewster said the city has generated $5.4 million in unexpected revenue over the past four years, and has renegotiated health insurance premiums and the trash collection contract to save money.

At this point, he said, "most of the costs in our budget are staff-related ... it's the only place we can save a million dollars."

Health insurance, pension contributions and other benefits account for 10 percent of the city's budget, according to figures released by the city. Workman's compensation premiums alone total $12,000 per month.

"Five years ago, we had a deficit," Brewster said. "I'm proud of the way city employees have rallied. We have succeeded in many ways by creating a fund balance. We have the opportunity to move forward, and we are going to continue to market the city. But we cannot ignore our fiscal responsibility."

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Not everything is gloomy, the mayor said. Renziehausen Park is in the second year of a five-year capital improvement project, the Youghiogheny River bike trail continues to generate traffic through the city, and a new business (Consolidated Power Supply) relocated to the industrial park at the former National Works site. Fifth Avenue and Walnut Street will be reconstructed next year with the aid of state redevelopment money.

In addition, Brewster said, the new regional courthouse and public safety complex planned for the Third Ward and the new flyover ramps into the industrial park will make the city more attractive for visitors, businesses and potential residents.

Next year's celebration of the Helen Richey centennial and the 50th anniversary of International Village also will portray the city in a positive light, he said.

"We've been able to make McKeesport a destination point again," Brewster said. "All of these things are important to positioning yourself as a viable community ... we've accomplished nothing short of a miracle that we're able under these conditions to talk about growth."

But while money is available for capital improvements, "there are not grants available for salaries," he said. "I've asked."

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Read More:

• Mayor Jim Brewster's budget message (PDF)


• City Administrator Dennis Pittman's budget message (PDF)