Mayor Jim Newberry announced $12.5 million in cuts to the city budget Friday, including 10-day unpaid furloughs for commissioners, the mayor and his senior staff.
Parks programs will be cut, and fire stations will continue to be closed for one day on a rotating basis.
Overtime will be eliminated and vacant jobs not filled, but there will be no layoffs. The city's rainy-day fund will not be tapped.
In a news briefing, Newberry said two goals in balancing the city budget were to avoid tax increases and layoffs.
The city anticipates $267.5 million in revenues, about $12 million less than was budgeted for the current fiscal year, which ends June 30.
The city faces more fire station "brownouts" as the fire department must eliminate $800,000 in overtime. Brownouts, when individual fire stations close for a day, saved $100,000 over the Christmas holiday, Newberry said.
Next Friday, 26 new recruits will graduate from the fire training center. Those recruits will add eight to nine people per shift, helping alleviate some of the need for overtime.
Newberry said he told Fire Chief Robert Hendricks that if at any time Hendricks thought public safety was being impaired by brownouts, Newberry would approve the overtime.
The economic slowdown is the major culprit in creating the city's revenue shortfall, as 83 percent of the general fund money comes from license and permit fees, the largest portion of which is the payroll tax.
To have the preponderance of general fund money come from payroll taxes is risky because of the volatile nature of the economy, the mayor said. When the local economy has a downturn with fewer people employed, the revenue stream decreases.
In 2009, Lexington experienced its highest unemployment in 20 years, spiking at more than 8 percent in June.
After revenue figures lagged behind projections for October, Newberry asked division directors in November to present him with plans for cutting 5 percent from their operating budgets.
In the end, he said, all divisions were not cut by the same amount.
The public works budget was reduced 5.4 percent; divisions of social services and general services were cut 5 percent, as was the council office; public safety was cut 1.9 percent. The largest expense reduction was the mayor's office and his senior staff, 8.3 percent.
In most departments, the biggest share of the cuts was in personnel costs — achieved mostly by not filling job vacancies and by cutting out overtime.
More than 68 percent of the city's general fund budget is personnel costs. Since 2007, the Urban County Government work force has been reduced by 201 employees through attrition, saving $12 million annually.
Newberry said he tried to spread the pain of budget cuts "to the fullest extent possible" throughout all divisions of city government.
"I tried to do what I could to keep the public from feeling the cuts," he said. Generally, there will be no reductions for partner agencies that work with the homeless, domestic violence victims and the poor.
The parks department will cut $800,000 from its budget, accomplished mainly through an assortment of program savings such as reducing the Summer Youth Jobs program by $80,000 and deferring park maintenance. The Avon golf course will be closed three months this winter.
The city considered closing four small swimming pools, but Newberry said the money saved would not have been significant, plus the closings would inconvenience citizens. No city swimming pools will close this summer.
Almost half — or $370,000 of the park departments cuts — came from not filling vacant staff positions.
Newberry requested division directors to ask their employees about taking voluntary furloughs to save jobs. The idea "did not receive widespread support," he said.
However, the mayor's senior staff and commissioners will take 10-day unpaid furloughs over the next six months.
The mayor's office will cut expenses by $226,500, which includes $100,000 of reduced operating expenses and not filling the vacant position of government affairs director, plus $34,500 from the mayor's special events and special projects budget.
The Urban County Council will be asked to eliminate $118,000 from its budget.
Between now and June 31, the city expects to see savings of $8.7 million through a variety of cost-saving measures across all divisions of city government.
Aside from the biggest savings from keeping jobs open, other cuts include $800,000 in fire overtime, $500,000 in police overtime, $241,000 in fuel for government vehicles, $800,000 in parks programs and maintenance and $226,500 from the mayor's office.
In a bit of good news, the city received $1.6 million in unanticipated funds from several sources, including $90,000 in a higher reimbursement rate from the federal government for federally housed prisoners.
Altogether this still left a shortfall of $1.9 million.
But the city carried forward $2 million from its 2008 budget, done through "expense management," said Commissioner of Finance Linda Rumpke. This will be spent to cover the shortfall, leaving the city with $105,000 to carry forward into 2011.