New London — Mayor Daryl Justin Finizio eliminated the city's personnel coordinator position Thursday and reduced the salaries of two employees in his office, moves that he said were in response to the city's budget crisis.

Bernadette Welch, who has worked as the city's personnel coordinator since October 2004, will retire June 30. She will not be replaced, and her duties will be absorbed by the office of Chief Administrative Officer Jane Glover.

Welch, 60, who makes about $88,000 per year, said in recent days she spoke with the mayor about the best way to achieve savings in her office. She said the elimination of her job was the obvious solution.

Early retirement would not affect her personally, because she is close to becoming vested in a pension plan that she acquired in a previous job, she said.

Finizio thanked Welch for her work and said her loss would be significant because of her institutional knowledge.

Welch came to the city after stints in human resources in Guilford and Greenwich, in part because she was looking for a challenge, she said. She suggested there will be more trying times ahead now that Glover's office is assuming her duties.

"It's going to be very difficult," said Welch, who added that the two other employees in her office will work in the chief administrative office. "Combining human resources with the mayor's office is going to be a near-impossible task because there's so much work that we do. But you do what you have to do in tough budget times."

Finizio also said the salaries of Tammy Daugherty, his office administrator, and Zak Leavy, his executive assistant, will be reduced by 5 percent effective July 1.

The mayor will also donate 5 percent of his salary to the Rev. Martin Luther King Jr. Scholarship Fund. The city charter precludes a reduction of the mayor's $86,000 annual salary.

"I believe these cuts need to be felt at all levels of government and that the appropriate way to lead in a time like this is to recognize that you will personally make the same sacrifices that you ask from others," Finizio said.

The personnel move and salary reductions were the first actions announced by the mayor to bring the city in line with the $83 million budget approved Monday by the City Council.

The budget, which will require about an 8 percent tax increase, was $4 million short of what Finizio had proposed. The council pared down his $87.1 million budget proposal, which would have required a 20 percent increase in the tax rate, before councilors reached a point at which many said further cuts would endanger city services.

The mayor reiterated Thursday that all city departments are facing significant reductions and that other positions will be eliminated. Those announcements are expected to come as department heads decide the best ways to make cuts, Finizio said.

In January, the City Council allotted nearly $300,000 in salaries for the transition to the new mayoral form of government. At the time, Leavy's pay was $55,000 and Daugherty's $70,000.

On Monday, the council cut about $86,000 from the proposed $426,637 for the entire mayor's office.

This is the second time Finizio has donated 5 percent of his salary to the King scholarship fund. He said he kept a campaign pledge in February by making the first donation.

jeff.johnson@theday.com

Editor's note: This corrects an earlier version of the article.