Mayfield Heights Passes Budget with $1.4 million deficit

Mayfield Heights will probably be in the red for the third straight year. The city's 2011 budget, approved by city council Monday, sets expenditures at $1.4 million more than revenues.

Councilman Joe Mercurio, finance committee chairman, said that's better than last year, when city officials budget for a deficit of $2 million. The actual deficit for 2010 was $925,000.

For 2011, revenues were set at $18.2 million and expenses at $19.6 million. Mercurio said the expenses, which are up 4.5 percent this year, are mostly fixed costs such as 3 percent raises contracted with unions and medical coverage increases. Mayfield Heights pays between $18,000 and $23,000 per employee family for medical coverage, he said.

Even with the projected deficit, the city has money left in a reserve fund. Mayor Gregory Costabile said the hope is that the city doesn't have to tap too much into the $6.5 million that is left before the economy turns around.

Income taxes are the city's main source of revenues and the recession has cut into the budget, which last had a surplus in 2008. The deficit was $700,000 in 2009.

"For us, it hit rock bottom in 2010," Costabile said. "There's not a lot we can do. Salaries are 80 percent to 85 percent of the budget."

He said department heads have controlled costs where possible and the city has taken steps such as undergoing an energy audit in 2009 to try to save on utilities. The city has applied for economic stimulus dollars to pay for money-saving recommendations in the audit.

"We're trying to do more with less," Costabile said. "What we can do is to be more creative."

Costabile said Mayfield Heights is in better shape than some other cities.

"Thankfully, we haven't had to lay anyone off or have furloughs," he said. "Hopefully we have ridden the tide."

He also doesn't want to raise the city's income tax rate of 1 percent, which he considers a major lure to attract businesses.

"The hospital has had a lot of development, there are good things going. Our corporate park is very popular," Costabile said. "Companies have said that they came here because of our 1 percent income tax. It's a big savings."