CONNEAUT — General fund revenue in 2009 will barely be enough to handle employee-related expenses, let alone operating costs such as utilities and fuel, Finance Director and interim City Manager John Williams told City Council at Monday’s work session.

The somber budget picture Williams has painted the past several weeks grew darker when he said there is a chance the city could enter fiscal emergency status “without drastic cuts.”

Williams was cautiously optimistic the city could meet payroll through this year, despite a six-figure dip in general fund revenue anticipated within the next two months.

“We’re very close to making payroll,” Williams said. “I think we’ll do it.”

He also repeated a claim that employee layoffs will be needed to keep the city afloat in the coming year. Conneaut is looking at a deficit of nearly $802,000 by the end of 2009 without some relief.

“We’ll need a 15 to 17 percent reduction in every general fund budget just to balance the budget,” Williams said.

Plummeting municipal income tax collections, the result of the slumping economy on local employers, are causing the dire situation, council has learned. Collections may be so meager next year that the general fund could be exhausted just to pay wages, benefits and pension expenses.

Some options, such as a wage freeze and street lighting reductions, would help — but not completely cure — the problem, Williams said.

Council will convene a special meeting at 7 p.m. Nov. 12 to discuss the budget crisis.

The city’s insurance consultant is seeking quotes from carriers in hopes of reducing its medical insurance expenses, Williams said.

Conneaut’s police and fire departments will also strive to reduce overtime expenses, chiefs told council. The fire department has already spent $140,000 in overtime and could approach $170,000 by the end of the year.

Fire Chief Bim Orrenmaa said the firefighters’ contract spells out in detail staffing requirements that sometimes result in overtime. While the department strives to use part-time firefighters as much as possible to fill vacancies on shifts, often full-time employees are tapped, he said.

Asked if members of Local 651 of the International Association of Fire Fighters would agree to revisit some of those contract provisions, especially in light of pending layoffs, Orrenmaa said he felt they would.

“I’ve got a sense they will talk,” he said. “They’re reasonable.”

Orrenmaa said a duty officer handles the scheduling at Fire Station One, home of the city’s full-time firefighters. Ward 4 Councilman Tony Julio suggested the chief handle the scheduling to maintain firmer control on overtime.