Now that Gov. Deval Patrick has cut $1 million from money the city receives to help pay the debt on the former city-owned Hale Hospital, Mayor James Fiorentini insists the city will survive. The city was left with $1.4 million toward its $7 million debt payment.

"The sky is not falling. We will survive this. We have been meeting for weeks to prepare for the possibility that we would be cut," Fiorentini said.

Fiorentini said he met with the governor to lobby for the city's position, and asked the city's department heads to prepare for the worst.

"We were prepared and ready," Fiorentini said.

Fiorentini said he plans no cuts in critical government services and no layoffs. Almost all city departments shared in the cuts except public education.

Fiorentini said, in a letter to the City Council, that to the extent possible, public education should be spared from the severity of the cuts but that it might not be possible to spare them should there be another round of cuts by the state.

Fiorentini said the first departmental budget cuts would be to his own office.

"We will cut the mayor's office budget by $5,000, which is a cut of 2.7 percent. That cut will come out of overtime and travel reimbursement for the mayor," Fiorentini said.

Fiorentini said he is far more concerned about the impact the dramatic economic slowdown will have on many of the city's residents.

"I have met with many residents who are really struggling, unable to pay their fuel, electric or medical bills, to meet mortgage, rent, tuition or credit card payments, or to find a good job. There are families in Haverhill struggling to put food on the table, and retirees who have lost pension benefits. Our challenge is not to let these cutbacks in our budget affect the quality of life for these families too dramatically. This is what we need to be concerned about," Fiorentini said.

On the plan submitted by the mayor, each department was cut an average of 4 percent for approximately $500,000 in budget cuts. The other $500,000 came from new revenues from fees which already had been enacted and from transfers from various reserve accounts.

Fiorentini planned cuts of between 1 and 1.5 percent to the Police and Fire Department budgets. Fiorentini said the cuts to the Fire Department will leave all fire stations open but will require some cutbacks in overtime.

The cuts in the Police Department will allow the city to immediately fill two vacant police positions. However, Fiorentini said that two more police officers he had hoped to add to the force will have to be delayed until the city knows more about its budget situation.

Firoentini recommended transferring $163,000 from its rainy day fund. The city has approximately $4.5 million in reserves.

Fiorentini cautioned against any larger transfers from reserves or the rainy day fund, noting that there may be additional cuts to local aid if the state's financial picture worsens in the weeks or months ahead.

"We want to manage and control this without this turning it into a crisis and we will carefully control spending and not drain our reserves. At the same time, we have to preserve our vital services like public education and public safety. This plan preserves vital services and leaves us with reserves to meet the structural deficit we know we face next year," Fiorentini said.

Fiorentini has asked for his plan to consolidate personnel and finances to be placed on the next School Committee meeting's agenda, adding that he would like an up or down vote on the proposal. He also asked for a discussion on consolidating the IT departments between city and schools, and as part of that, consolidating payroll functions.

Many other cities have consolidated both finance and personnel functions, including Methuen, Salem, Andover, Barnstable, Reading and several other smaller communities, Fiorentini said.

School Committee member Joseph Bevilacqua believes the consolidation should at least be tried as a way to save resources.

"In consideration of the reduction in city finances and the apparent continuing ongoing need for oversight of the school department budget and financial process, I believe that the consolidation should be tried and given an opportunity to determine if it will save financial resources and improve financial and other operations, with the goal of saving as much money to keep teachers in the classroom as possible," Bevilacqua said.

The issue will be taken up at the School Committee meeting on Thursday, Nov. 6, at 7 p.m.