Four years ago, when state fiscal forecasters looked at the year 2009, they saw a city of Pittsburgh bleeding red ink to the tune of $115 million -- a scenario that suggested massive layoffs or crushing tax hikes.

But yesterday, Mayor Luke Ravenstahl's administration rolled out a budget for next year that is taking in more money than it spends, and grows the city's savings account to nearly $97 million. And though the mayor took the day off with a fever, his top aides heaped the credit on him.

"Mayor Ravenstahl didn't just meet the expectations. He exceeded all of them," said Chief of Staff Yarone Zober. "Right now, we feel like we're on the right path to recovery."

The predictions made in 2004 morphed into a state-supervised recovery effort, and that wrought the first of the city's five-year plans. Yesterday's budget included the fifth such plan, and it doesn't end well, with big deficits projected in 2013. The administration argued that it is laying the groundwork for ensuring that the dire predictions for future years don't come true, starting with the elimination of 65 positions next year.

Some other city officials, though, said that building up the savings account and paring the payroll are no substitute for making big changes like merging functions with Allegheny County or taking a run at the still-troublesome debt and yawning pension gap.

The city expects to take in $443 million and spend $440 million next year. The parking tax will drop from 40 percent to 37.5 percent, and a sliver of the wage tax will be shifted from the school district to the city -- both changes mandated by the state Legislature in a 2004 tax shift.

The grim forecasts of 2004 had the city spending $518.7 million next year, and the rescue plan put together then for 2009 pared that to $460.6 million. The city is spending $20 million less than that mostly because it refinanced some debt, trimming payments, and got a better deal on health insurance than it expected.

Police, fire and public works spending is almost identical to the original plan's projections.

Revenues are another story. The original plan had the city bringing in $471.1 million next year, but now expectations are $27.6 million lower. That's because property taxes essentially have been frozen by Allegheny County's base year assessment system, and casino revenues are coming in later than expected because of licensing delays.

The administration predicts that expenses will race past revenues in 2011 and beyond. The tentative plan calls for drawing down the savings account, but administrators want to avoid that.

"We know that we have problems in the out-years," said Mr. Zober. "In 2010, 2011 and 2012, we need to find more revenue or look into ourselves" for cost cuts.

In the works for later years are consolidations of vehicle maintenance, payroll processing and computer systems with the county, said Finance Director Scott Kunka. None of that, though, will kick in next year. Those mergers might be in place in 2010.

That's not soon enough, said City Council Finance Chair William Peduto.

"We can't waste another year, like we wasted so many past years," he said.

Mr. Peduto noted that in April, Mr. Ravenstahl and County Chief Executive Dan Onorato promised swift consolidations of overlapping services, even as they pledged to push for a 2009 referendum on a full city-county merger. "In my terminology, immediate means now, not two years from now," he said.

The full merger referendum push has stalled without state legislation enabling it.

Also missing from the 2009 budget is any impact from a reorganization of fire and paramedic services recommended by a consultant to the Intergovernmental Cooperation Authority, which is empowered by the state to approve or reject city budgets. Mr. Kunka said there will be savings as some recommendations are implemented in later years, and as increased demolition of abandoned buildings reduces the number of fires.

The administration plans to put an unprecedented $50.8 million into its beleaguered pension fund. That's 15 percent more than the legal minimum, billed as an effort to start filling a pension pot which, at mid-year, contained just $330 million, versus the $899 million it needs to cover future obligations.

That's a start, said City Controller Michael Lamb. "This solution is going to take more than just the city kicking in more money. The state has to do more and the employees need to do more."

Nearly all of the 65 positions being weeded out of the 3,300-person payroll are already vacant. The biggest chunk is the 14 positions cut from the controller's office, in a move Mr. Lamb backs.

"The mayor had every department review, roster spot by roster spot, position by position," said Mr. Zober. "When there used to be a vacant position, the question was, 'How fast can we fill it?' Now it's, 'Do we need to fill it?' "

The budget requires the approval of the Intergovernmental Cooperation Authority, which got it late Monday, and City Council, which begins its formal deliberations in November.