Christmas will be bleak for employees of Hazleton unless the City Council of the Luzerne County town takes steps to avert a financial crisis next week.

If council does not act when it meets Thursday, many city employees will be laid off next Friday. Personnel considered essential, such as police and firefighters, will continue working, but without pay.

"This is not a time for bad news," said Steve Hahn, Hazleton's acting city administrator.

James Perry, president of City Council, is optimistic the problem will be resolved at next week's council meeting.

"It's Christmas time and we shouldn't be in this position," said Perry. "No one wants to hold the residents and city workers hostage."'

"I hope he's right," said Hazleton Mayor Joe Yannuzzi.

The mayor said if the problem is not resolved next week, "we would have to carry the lay-offs well into the new year." He explained not paying city workers for most of December would get the city "nowhere near" the half million dollars it needs.

Hazleton is facing a $500,000 shortage in revenue because City Council never approved new stormwater maintenance fees on residents, businesses, even schools, churches and hospitals.

That non-existent $500,000 is "a significant percentage" of the city's total 2013 budget of $8,680,000, said Hahn.

Hahn said the cash-strapped city has no reserves it can dip into to resolve the financial crisis. He also said Hazleton is not in a position to borrow money, because it does not have a good credit rating.  "This city has been struggling for a long time, for a variety of reasons."

City Council anticipated revenue from those stormwater fees when it approved the 2013 budget, but it never approved the actual fees, explained Hahn.

Those annual fees would range from $25 to $60 or more, depending on the size of properties in the city, said Hahn. He added a homeowner with a small yard probably would pay $25, while a business owner could pay $60.

The administrator said Hazleton employs about 100 people, including 40 in the police department and 20 in the fire department.

The mayor said Hazleton already is operating with only a skeleton crew for a city its size and it should have many more police and firefighters.

Hahn said if a snowstorm hits the city, even the 17 highway department employees will be considered essential personnel, because they will be needed to plow streets.

"No personnel in the entire city really are non-essential," said Hahn. "Everybody has an important role to fill."

Hazleton has more than 25,000 residents.

Hahn said in August, City Council finally voted 3-2 to approve a stormwater maintenance fee ordinance and directed the city's administration to determine the fees. He indicated a number of factors went into developing those fees, including the amount of stormwater leaving each property and entering the city's stormwater sewer system.

The proposed fees were presented to City Council in October, but it delayed acting on them, possibly because three of the five council members were facing re-election. (Two were not re-elected, including Perry.)

Council members told the administration they needed more information on how the fees would impact people.

On Nov. 21, council rejected the proposed fees by a 4-1 vote, said Hahn.

Perry was one of those four votes. He said the majority of council members did not believe the process could be set up in time to collect the fees before the end of this year.

But Perry said Hazleton's mayor never linked rejecting the fees to any lay-offs of city employees just before Christmas. "That word never came across," said the council president. "We never knew how bad it was. The mayor was never in tune with us to say 'if you don't pass this we have serious problems'."

"We kept telling them they had to pass it because we put it in the budget," said Yannuzzi. "We had no idea they would shoot it down. It was a shock."

The mayor said City Council members know that about 80 percent of Hazleton's budget goes to pay labor costs.