Cincinnati Mayor Mark Mallory last week reduced the number of layoffs in his proposed 2014-2015 budget, as the city awaits a ruling on a lawsuit that has delayed a plan to privatize its parking system that Mallory hoped to use to plug a deficit.

Mallory said there is an additional $2.8 million available for the two-year biennial period, with the general fund budget totaling roughly $700 million. The new money comes from a mix of cuts and unexpected revenue. The proposal is to restore 18 firefighter positions and 17 police positions, reducing the layoffs to 53 and 49, respectively. Five other positions in other departments were also restored.

To finance the move, Mallory is eliminating $1.3 million of funding to several outside non-profit groups, including $200,000 for the Port of Greater Cincinnati Development Authority, and closing two recreational centers.

Mallory had warned that hundreds of layoffs will be necessary due to a delay in a $200 million plan to privatize the parking system. His administration had built its budget around the plan, with plans to use the up-front cash payment of $92 million to eliminate a deficit.

But opponents sued to block the plan, saying it should go before voters. The case landed in the First District Court of Appeals after Cincinnati appealed a lower court's injunction that blocked implementation of the lease. The court heard oral arguments May 7, and the city said it hopes for a ruling in a few weeks.

The plan calls for the city to lease its meters to the Port of Greater Cincinnati Development Authority for 30 years and its garages for 50 years. The port authority would sell roughly $92 million of bonds to finance a one-time up-front payment to the city for the asset. It would privately place a note with the city, and make payments on the note twice a year to pay off the rest of the roughly $105 million.

Guggenheim Securities LLC would be the underwriter. Public Financial Management is the city's financial advisor on the deal. Calfee, Halter & Griswold LLP is bond counsel for the port authority.

Of the $93 million, the city would deposit $53 million into its general fund and $39 million into a fund for various capital projects and economic development. It would set aside $6.3 million to add to the city's reserve account.

"I look forward to working with City Council to finalize a city budget that minimizes the negative consequences of the delay in implementing the Parking Modernization Plan," Mallory said in a budget memo to the council.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.