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Jeannette faces 'deep' layoffs, officials warn

| Tuesday, Feb. 19, 2013, 12:15 a.m.

The City of Jeannette Monday warned employees that “deep” layoffs are coming by early March and gave workers a Friday ultimatum to offer solutions to the city's financial problems.

Mayor Robert Carter said he addressed police officers, firemen, public works employees and city hall workers to inform them that a formal two-week notice is coming. City workers are represented by the Fraternal Order of Police, Teamsters Local 30 in Jeannette, and the International Association of Firefighters Local 78.

“I told them we're at the situation where deep layoff cuts are needed,” he said. “I put a challenge to employees and unions to see if there's some type of remedy. We're trying to do the numbers, but all departments, one way or the other, will be affected. No one is going to go untouched. We can't go any further without layoffs.”

City workers have been concerned about the financial condition of the city. A number of workers attended last week's city council meeting to see if council would announce furloughs. Carter said workers knew layoffs were possible.

“Layoffs are something that's definitely going to happen. They got that loud and clear,” Carter said.

The department hardest hit likely will be the police department.

Council would have to lay off three part-time officers along with four full-timers if the city is to realize any savings and bring the size of the force from a dozen to eight plus Chief Brad Shepler. The police department, with its $1.9 million budget, is the largest expense in the city's $5 million spending plan. In addition to salaries, the city has to pay $546,000 to their pension plan this year.

The city faces two options, municipal bankruptcy or state oversight under Act 47, a bailout plan for distressed municipalities.

“I would put all my emphasis on Chapter 9 (bankruptcy),” Carter continued. “The only thing with Act 47 is that it ends up finding ways of raising taxes. It's more burdensome on taxpayers. If you eventually become solvent, you could still be in Act 47.”

City council will meet Wednesday with an official from the state Department of Community and Economic Development to discuss how the city will raise the money needed to make its payments to the police pension fund and a recent court-ordered judgment to a businessman and his attorney.

Scott Avolio said Mike Foreman of the DCED and council will meet at 6 p.m. at city hall. The meeting is not open to the public.

“The DCED would like information on recent developments,” Avolio said, declining to offer specifics.

Jeannette failed to make a mandated $350,000 payment to the police officers' pension fund for 2012. The city was hit last month by a court-ordered judgment of nearly $77,000 in damages and more than $158,000 in legal fees involving a long-running dispute with businessman Frank Trigona. And officials had to borrow $350,000 to keep the city running until tax revenue is collected.

Jeannette will have to revise its 2013 budget after ending 2012 with a $250,000 deficit. Council members had predicted they would end the year with a balanced spending plan.

Although council members have said they have not considered the move, they could be forced to seek a tax hike to pay the judgment to Trigona.

In 2010, Westfall Township in Pike County lost a federal lawsuit and had a $20 million judgment entered against it. After negotiations, the amount was reduced to $6 million. Westfall has to pay the plaintiff $75,000 every quarter for 20 years to satisfy the judgment.

To do that, the board of supervisors had to raise property taxes and dedicate the increase to paying the judgment.

Also looming is arbitration with the city police force.

Unless the city and police reach an agreement, they will submit to binding arbitration next month.

If an arbitrator rules in favor of the police, the city will face another financial obstacle if it has to pay officers more than council offered in contract negotiations.

Officials already have taken steps to cut costs and raise cash.

Some assets will be sold to help meet the pension payment.

The city has notified on-call firefighters that they no longer will be paid for responding to emergencies. They will have to serve as volunteers if they want to continue to work with the city's three paid firemen.

Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or at rgazarik@tribweb.com.

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