IRONTON — A projection of the city’s possible financial future released this week shows Ironton burning through nearly all of its entire general fund reserve by the end of 2010 while projecting a $605,000 deficit by the end of 2011.

The estimate, made Thursday before city council’s budget and finance committee, paints a gloomy picture of how decreased revenues and increased expenses could affect the city’s main operating fund and its cash surplus by the end of next year.

The unofficial tentative budget, drafted by Finance Director Kristen Martin ­and released as part of the city’s obligation to provide future taxation estimates to the Lawrence County Auditor’s office, projects Ironton collecting only $4.74 million in general fund revenues while spending more than $5.35 million in expenditures for 2010.

The $614,000 difference would devour nearly all of the $622,000 carryover cash-on-hand balance the city estimates it will start 2010 with.

Should Martin’s estimates stay on par for 2011, Ironton would use the remaining $8,000 in reserves and have to find a way to shore up and recover an additional $597,000 in general fund deficits by the end of 2011.

When asked by Councilman Mike Lutz if, based on her projections, the city could indeed consume its entire general fund cash reserve and end up $605,000 in the hole by the end of 2011, Martin concurred.

“Theoretically, what you are saying is true,” Martin said when confirming Lutz concerns on 2011.

However, Martin told the committee that both her revenue and expenditure estimates were based on a “worse case scenario” and from that were mostly likely “not true numbers.”

Ironton started 2009 with more than $779,000 in its general fund surplus and projects it will nibble more than $156,000 from it to balance the line item out at the end of this fiscal year.

Martin’s current year estimates were based off city financials ending May 2009.

The general fund is the main operating line item for the city and must at least balance at the end of each fiscal year.

While revenue for the general fund are collected or transferred in from more than 50 different line items, nearly 85 percent of it is collected from five different fields: income tax, the city’s $8 monthly municipal fee, general property tax, local government funding and municipal court costs.

Martin said much of her estimates took into account lower than expected monies coming in on revenue sources such as income tax and local government funding.

Local government funds are monies distributed to counties and cities through a complex formula that comes out of the 4.2 percent of revenues the state collects on sales and use taxes, income taxes, public utility taxes and corporate franchise taxes.

As the recession has taken its toll on the state of Ohio the past 14 months, high unemployment and less consumer spending has resulted in lower that budgeted local government funding for many cities and counties throughout Ohio.

Sewer and water fees are earmarked directly to separate sewer and water accounts and by law are not to be co-mingled with Ironton’s general fund unless done by council ordinance.

Salaries, hospitalization, Medicare and retirement costs make up nearly all of the expenses that burden a city’s general fund. Ironton is no different.

But what Martin’s estimate shows is the huge jump in general fund expenditures the city could possibly be burdened with in both 2010 and 2011.

According to the figures released to the committee and council this week, the city of Ironton’s 2010 general fund expenditures will zoom up more than $226,000 from what Martin estimates the city will spend for 2009.

A closer examination illustrates nearly all of the increases being tied to the wave of new contracts Mayor Rich Blankenship negotiated and council approved this spring and summer for police officers, firefighters, unionized city workers and non-bargaining city employees.

While containing small, but noticeable hourly raises, the contracts were laden with bonuses and perks for city workers.

Some of the extras include bonus pay for police officers being able to shoot a gun correctly, fitness bonuses for firefighters to stay in shape and taxpayers footing the entire share some city employees are required to personally pay into the state’s public retirement account.

Personal reasons excused Martin from most of council’s full meeting. However, certain members of council again requested a separate special meeting to discuss the city’s current financial state.

Three separate times since June, individual members of Ironton City Council have formally requested that Council President and Budget and Finance Chairman Bob Clearly call a special committee meeting to examine the city’s first half 2009 numbers and how estimates for the second half of the year plan on coming together.

The meetings have never taken place.

A request made last month by The Tribune to meet with Blankenship and Martin to discuss the city’s current and future finances were not responded to.

Despite being responsible for the expenditure side of the city’s budget, Mayor Rich Blankenship would not comment on the document and deferred all questions back to Martin.