City employees and taxpayers, including Mayor Scott Avedisian, are living in a world without answers.

Will there be layoffs, a reduction of services and perhaps the complete elimination of some programs as the city looks to trim another almost $5 million from the current budget? And what will happen next year as the full effects of the recession are felt - maybe worsen - and city revenues drop and the state scrambles to make up for a projected $470 million shortfall?

But then, on the bright side, what might be the impact of a federal stimulus package? How much money will flow to the state, when might it come and what strings will be attached? Will those funds, which Senator Sheldon Whitehouse estimated yesterday could be as much as $3 billion over five years for Rhode Island trickle down to the cities and towns and what might that mean for their budgets?

Everyday is a new venture, Avedisian said yesterday. Even though the mayor said he had had a long conversation with Rep. Steven Costantino, chairman of the House Finance Committee, the picture of how cities and towns might fare with either the supplemental budget or the stimulus package is as vague as it has been.

"There are a lot of different plans to close the [state] deficit," Avedisian said.

But the administration hasn't waited to wield the scalpel locally.

Last week the mayor announced $2.3 million in cuts to the current budget and by March 1 he plans to have in place a second round of cuts - assuming there isn't a windfall from a stimulus package that alters what has to be done to balance the state budget totaling as much as $5 million.

So far the cuts are from supplies and commodities, overtime costs, utilities, contracted services and seasonal salaries. There are no layoffs in this first round of cuts.

Yet, layoffs are on the table, says Avedisian. The mayor said because of the cost of paying unemployment the city would have to layoff two employees to save the salary of one. Because the city self-insures unemployment, Avedisian said he would rather be paying a worker $800 a week, for example, than $580 to have the same worker sit at home.

Other options to generate savings have been proposed such as furloughs and a reduction in fire department manning requirements.

Avedisian said if every city worker were required to take five days of furlough, the city would save about $700,000.

"The same solutions are being thrown out there," he said, "a full week of furlough doesn't do much in solving this budget."

As for minimum manning requirements, Avedisian said legislative changes being proposed as part of the supplemental budget package would benefit other municipalities, not Warwick.

Minimum manning requirements in Warwick call for three on a ladder truck and three on an engine. The minimum for a rescue is two.

"How are you going to treat a patient and drive him to the hospital too?" Avedisian asks.

On the positive side, the mayor said, city and town officials are working together to address issues rather than looking at only those provisions that might help them.

"We all need to solve this problem for one another," he said.

A provision of the supplemental budget legislation that would establish co-payment of health care insurance at 25 percent is being looked at as a significant savings for the city. Presently municipal employees pay $11 a week in co-payment.

Prior to the governor's supplemental budget, the mayor had been in discussions with the city's three unions on concessions to help offset projected loss of state revenue.

"We had reached a consensus but that's been thrown upside down at the moment," he said. Avedisian said he continues to have talks with the unions but until the 25 percent mandate is finalized he doesn't see an agreement.

Driving the shortfall in the current budget is a combination of factors. The big chunk is the governor's proposal to cut $4,782,039 in state aid. The city is also experiencing a $2 million decline in building fees and realty transfer taxes. The city has also seen a decline in investment revenues and a slight decline in tax receipts.

Major cuts making up the $2.3 million budget reduction this year include:

• $252,200 from the airport litigation funds. These were funds set aside so the city could retain consultants and lawyers, if decided, to evaluate the Rhode Island Airport Corporation plan to extend Green's major runway.

• $378,000 in gasoline costs resulting from the decline in fuel costs. City Finance Director Ernest Zmyslinski said the city had budgeted gasoline at $4.17, adding, "as long as it stays down we're good."

• $100,000 in street lighting. Zmyslinski said this amount could be made up by removing lights and/or reduced utility costs. "At this time there is no plan to darken sectors of the city," he said.

• $416,876 in payments to the Fire Pension account. Zmyslinski said this reduction reflects a reduced contribution as established by actuaries.

• $186,500 in overtime costs from department budgets throughout the city.

Avedisian also cut contributive support to a number of agencies. A total of $47,850 in cuts were made to athletic groups including Little Leagues, girls ice hockey and St. Gregory's youth baseball. Another $23,225 in cuts were made to civic organizations including $5,500 to the Warwick Veterans Council, $4,500 to the Gaspee Days Committee, $5,250 to the Warwick Arts Council and $5,250 to the Warwick Museum.

Avedisian said "no one is happy with the cuts, but there are very few spots to pull the money from."