Weeks of review, hiring freezes and slashing spending to the bone managed to trim more than $500,000 from Leitchfield’s 2012-13 general fund budget, but that wasn’t enough to avoid a deficit.

And that deficit spending is a trend the city “just can’t continue,” the mayor warned during the Monday, June 4, city council meeting.

At the meeting, the council approved the first reading of the 2012-13 budget, which projects general fund revenues of $5.7 million and spending of about $6 million, leaving a roughly $299,000 deficit.

In the utilities fund the city is projecting revenues and carryover of $13.23 million and spending of $8.6 million; the tourism fund is expected to have $681,000 in revenues and $579,000 in expenses.

A second and final vote on the budget is expected in coming weeks.

This is the fourth straight year of deficit budgets for the city. The 2011-12 budget, for example, projected a $494,000 shortfall. According to an amendment approved Monday, though, the city actually finished the 2011-12 fiscal year $344,000 in the black.

“When the (budget) committee received their first copy of the budget, there was an $817,000 deficit for them to resolve,” Mayor William Thomason said in his budget message. “Every line item of every department was thoroughly researched and in the end, there was no department untouched by budget cuts.

He said the city still has a little more than $3 million left from the surplus it had built up since 1994, but likely faces a few more years of dipping into it.

“We went from about 3,400 jobs to about 1,300,” the mayor said, explaining with that many job losses the occupational tax receipts took a beating.

The only way to get that income back is through attracting new businesses to the city, he said, but even with positives like the recent announcement that New York Blower Co. will open a factory in Leitchfield it will be slow growth.

That company has said it will employ 125 people within five years as it converts the former Trim Masters plant. Trim Masters (by then known as Toyota Boshoku America) closed in July 2009, leaving 300 people out of work.

If the local economy doesn’t grow in the next couple of years, Leitchfield is going to seriously have to look at cutting services, increasing rates for some services, cutting employees’ benefits of laying people off, the mayor and council members said.

Salaries, benefits and required insurance like workers’ compensation for the roughly 50 full-time city employees paid through the general fund, for example, total more than $3 million.

“Through the last several years our employees have done a great deal of sacrificing and continue to do more with less in order to maintain our level of services,” Mayor Thomason said. “This has been our method of survival over the last couple of years and our employees have done a tremendous job. …Unfortunately, this year is no exception, and we are requesting again that our employees reduce costs where possible.”

As has also been the case in the last couple of years, the city will eliminate all projects from its budget, and departments will be able to buy new equipment or vehicles only prior council approval.

That’s a worry, the mayor said, because some of the equipment will need replacing or major repairs in the future and the budget won’t allow it.

In other action, the council:

* Approved closing Public Square to all vehicular traffic starting at 5 p.m. on Friday, July 20, for preparations for the next day’s Twin Lakes National Fiddler Championship. The square would likely remain closed to traffic through late Saturday night and possibly into Sunday morning.

* Reappointed Ryan Bratcher, Sue King and Randy Pauley to the tourism commission, for three-year terms each.