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"It's an anxious time for everyone involved," Paul G. Colangelo, parks and public works director, said last week as city department heads rewrote their budget requests to cut spending by 20 percent next year.

City Administrator Anthony J. Restaino ordered the new proposals to help plug a projected $7.2 million hole in next year's budget. He and department heads were unwilling to provide details on the new proposals, which were described as "drafts."

But speculation was rife among city workers about the impact of such cuts, which would have to be accepted by the city administration and approved by the City Council. Some contend the city cannot cut spending so deeply and still provide services.

"Chaos," one city worker said. Two employees, who asked not to be identified, said morale nose-dived after Restaino requested a 20 percent across-the-board cut more than a week ago. One worker criticized the timing, only three weeks before the mayor is scheduled to present his budget to the Council.

"You have to look at where your needs are and where your waste is," the employee said.

Restaino said department heads are best-qualified to propose how to maximize savings and minimize adverse effects, and their proposals are one way to explore options.

The city, he said, has to do something or impose a "huge" tax increase, which he projected at 35 percent.

Colangelo, for his part, said he would propose cutting jobs in the Public Works Department "in the most sensitive manner possible with respect to people's livelihoods and service levels," yet meet Restaino's request for a 20 percent reduction in expenditures.

He said he expected the Parks Department and Building Trades Divisions to cut positions through attrition rather than layoffs.

"That's the philosophy we used. We did what we were requested to do, and we did it with kid gloves," said Colangelo, whose combined departments are the city's largest and, with the Police and Fire departments, have the most direct impact on residents.

Josephine T. Bongiovanni, president of United Steelworkers of America, Civil Service Employees Local 15071, the largest of three steelworkers units with 155 members, and Thomas Winegarden, president of the Police Club, which represents about 135 officers, said Restaino halted contract negotiations with the city's eight labor unions last week. The contracts will expire Dec. 31.

Winegarden and Restaino said negotiating sessions will not resume until after Nov. 1, when Mayor James C. Galie is scheduled to release his budget.

Mrs. Bongiovanni said she doesn't believe the city can cut jobs by 20 percent cut.

"There's no way they can take 20 percent of the bodies and continue to provide the same level of services, and that means that not only is the public going to get an increase in taxes, they're going to get a reduction in services, and that's bad," she said.

Winegarden said a 20 percent cut in the Police Department would mean the loss of about 28 officers, which he described as devastating.

Fire Chief Richard J. Shiah said a 20 percent reduction in the Fire Department would amount to eliminating 33 of 152 positions.

At Monday's Council meeting, John G. Accardo, Council chairman, plans to ask city officials to meet with representatives of Niagara University's School of Business Administration to discuss formulating a long-range financial plan for the city.

A proposed $25,000 contract with the university was rejected last year.

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