City officials in Butler working on preparation of the 2006 budget must focus their attention on long-term cost savings as well as exploring some revenue-enhancement ideas offered by Resource and Development Management of Pittsburgh (RDM), the firm brought in as part of the state's Early Intervention Program to help cities steer clear of distressed-city status.

Last year at this time, the city faced a serious budget deficit that was only avoided when lawmakers in Harrisburg passed a law permitting a significant increase of the occupational-privilege tax, to $52 from $10. The increased tax revenue raised from the renamed Emergency and Municipal Services Tax staved off Butler's financial crisis.

It had the same effect in many other towns and cities. But the additional $300,000 in tax money coming to Butler coffers from that tax did not solve the city's financial crisis, which remains in the form of a structural deficit in which expenditures exceed revenues. The financial projections provided to city officials by RDM last week suggest that the city still faces a possible $750,000 deficit in 2008 if nothing is done to correct the imbalance between revenues and expenditures.

One year ago, the city was on the brink of bankruptcy. Following the city council's implementation of a $26 Emergency and Municipal Services Tax (it could have set the city's portion of the tax at $47), the sense of urgency was removed. In some ways, that relief, though welcomed at the time, was not a good thing - it masked the true extent of the city's financial woes.

The city still faces very serious financial challenges. The temporary avoidance of bankruptcy should not diminish the determination to balance the books, with the greater emphasis on reducing expenses.

Very few, if any, of the necessary changes will be easy. Some will be very difficult, requiring political courage and adept negotiating skills. But, the city's undisputed precarious finances provide political cover for making tough decisions and for the serious changes that must be implemented.

City residents should become involved and learn more about city finances. A good place to start is to read the outline of the RDM report, which appeared on Page 8 of the Aug. 28 Butler Eagle.

Residents also should attend meetings, specifically the special city council meeting scheduled for 5 p.m. Sept. 9 at the city building, when potential cost savings or ideas for raising additional tax revenue are to be discussed.

Beyond educating themselves on the issues, city residents should support elected officials in making tough decisions - with the priority being a reduction of expenses.

The RDM report spells out in stark detail the city's financial mess and offers many ways to improve the situation. Doing nothing, or only making minor changes, is not an option. Costs covering fuel, insurance, health care and other items will continue to rise, while tax revenues remain stagnant. Both sides of the equation are unacceptable.

Some of the suggestions offered by RDM are doable; others, such as countywide reassessment, are unrealistic in terms of expectation.

In addition to providing a possible road map to financial health, the RDM report also provides city officials with political cover. The city has been on the brink of financial crisis for several years, and serious steps to change the city's financial picture must be taken this year. More will be required in the coming years, but the process must start now.

With the city involved in negotiations for new contracts for its public safety and office employees, it is critically important that some significant cost reductions be secured in the next labor agreements.

The RDM report makes clear that more of the same in terms of the operation and costs of public safety - the source of 68 percent of city operating costs - will quickly send city finances into the red.

Butler is at an extremely critical juncture. Some potentially positive development ideas are being pursued for various parts of the city, but re-aligning city finances to reflect the new realities cannot be put off any longer.

It is not overstating the situation to say this is now a do-or-die scenario in terms of the viability of the city. City officials have a tough job ahead of them, and they know the public expects results.