Aldermen and New Haven residents gathered at a marathon hearing Wednesday night to hear and discuss the mayor’s newly revised — and $10-million-smaller — city budget.

City Hall grudgingly offered new cuts to the now-$456-million budget after a state aid package that Mayor John DeStefano Jr. and many aldermen had lobbied vigorously for fell through last week. The mayor’s proposed closure of a senior center and relocation of three police substations elicited the greatest response from attendees, while others argued that the current crisis is a symptom of past overspending by the city. Still, city officials defended the cuts as the best solution to a situation that was out of their control.

Under a measure approved by the State Finance, Revenue and Bonding Committee in early April, New Haven would have received an increase of more than $10 million dollars through the Payment In Lieu Of Taxes program, which reimburses municipalities for non-taxable property owned by nonprofits such as hospitals and colleges. But despite New Haven representatives’ hopes that the bill would pass the full legislature, the effort died as the legislative session ended May 7 as some lawmakers — worried about a budget that already looked to be in deficit — declined to provide the extra PILOT funding.

An immediate exchange of blame between DeStefano and Gov. M. Jodi Rell’s office — which has flared repeatedly over the past few months — has quieted since last week. At a press conference last Thursday, DeStefano, who was not present at last night’s hearing, said the lack of PILOT money means the city will have to make painful cuts to its budget.

“I don’t believe this is a budget that moves the city forward,” he said.

At Wednesday’s hearing — which lasted three hours, prompting many in attendance to leave before getting a chance to speak — many residents pleaded with the aldermen to avoid cuts to specific programs, but many also offered critiques of the budget process in general, asking that it be more open and transparent in the future.

Under the downsized city budget, which city Budget Director Lawrence Rusconi detailed for those in attendance, programs and jobs across all departments will be hit. As a result of the cuts, homeless shelters will lose $500,000 in funding and the city’s Small Business Initiative and Fair Rent department are being eliminated.

Of great concern to many residents who testified last night, the locations of three police substations, including one on Whalley Ave., will be closed and relocated to city-owned buildings such as local schools. The West River senior center will also be closed and merged with another one nearby.

Even so, the city is still asking for $3 million in concessions from New Haven unions during ongoing contract negotiations. Rusconi said at the hearing that under concessions already discussed in negotiations with the Executive Management Union, union members would see an increase in costs for health benefits and a 2-percent increase in their pension contributions.

The city did the best it could with little time and even fewer options, Rusconi said at the hearing.

“The goal was to try to preserve the core services being provided by the city,” Rusconi said, adding that the city still had not finalized anything with the unions. “There is some risk, but hopefully the financial situation will bring everyone to the table.”

Board President Carl Goldfield said after the meeting that he had been hopeful Hartford would come through and support the city, but that given the state’s deficit, it became clear that the city should not expect its requested money.

More than three dozen people showed up to the meeting. Approximately eight seniors who use the West River center sat in the audience holding placards protesting the planned cut, before testifying on its behalf.

City officials explained that the Westville center is only 1.4 miles away from the other center, and the city will be able to bus seniors there. The city chose to close the West River location based on the availability of programming space and the cost of utilities at the West River facility, they said.

But that was little comfort for some seniors in attendance.

Mary Jane Simmon was among the many who testified to the center’s dedicated staff and engaging programs, including games, sewing and creative writing, which the seniors said they use four or five days a week.

“[It has] all the good things we really enjoy,” Simmon said. “It’s one big family. I’ve been coming to the center for nine years.”

Ward 28 Alderman Mordechai Sandman spoke to the concerns of some of his constituents, questioning whether a school was an appropriate place for the relocated Whalley Ave. police substation.

But Chief Administrator Rob Smuts ’01 said that substations no longer serve primarily as arrest locations or places for police to do paper work. He said schools could become positive places for interaction between students and police officers.

“I don’t now how much heated or dangerous stuff happens in substations,” Smuts said. “The original purpose was a couple of things. One was to give a neighborhood a place to meet with local police officers. Another was to have officers spend more time in district, to be closer to where they are patrolling. But now we have [computer] terminals, and [the idea is to] have paper work done in patrol cars on the corner.”

Smuts emphasized that the city is not closing any of the substations — just relocating them — and that police officers can do a better job of being visible by sitting in their cars than by staying inside a building.

But that may do little to satisfy some local residents who want the substation’s presence on Whalley Ave. Just after the meeting began, about a half dozen residents marched silently into the room holding protest signs — “Close down the criminals, not the police” and “Don’t Abandon Whalley Ave.” — before leaving with a chant: “Save our substation! Save our substation!”

Nadine Herring, a member of the Whalley-Edgewood-Beaver Hills management team said the community has done much over the past few months to make the neighborhood safer and bring businesses into the area.

“Moving is the same as closing,” Herring said. “It would bring destabilization to the area.”

Even as many residents in attendance advocated for their favorite programs, just under half of the speakers said the city needs to do more to save money.

Ken Joyner, a frequent critic of city spending, said the cuts being considered were unrelated to the increases made between last year’s budget and the original version of this year’s. In addition, he said, even as cuts were being made to the general-funds budget, capital expenditures were being increased — for example, he said, the parking meters that the city expects to provide $54,000 in revenue would cost $50,000 to install.

City resident Harry David said the city needs to look more long-term so that the same problems do not arise again in the future. And Gary Doyens — another city budget watchdog — suggested that the city look deeper to find areas for more cuts.

“We are here because we have been spending wildly for a period of years,” he said. “I would encourage the board to have no sacred cows.”

Tim Halahan said he thinks the timetable for assembling the city’s budget is unwise, since final approval has to come at around the same time the state budget is reaching completion. As a result, he said, New Haven’s budget sometimes has to undergo hasty last-minute alterations, leading, he suggested, to less transparency and careful deliberation.

But Goldfield said after the meeting that the alderman have had enough time to consider the budget.

“We’ve had this budget for quite a while — it’s not hard to understand,” he said. “It might be nice to have more time, to go to a calendar-year budget, but I don’t think [our timing of the fiscal year] is ridiculous.”

Ward 5 Alderman Jorge Perez added after the meeting that there would always be special state legislative sessions or other reasons for which the city would have to tweak its budget, even if the city calendar were changed. But in this case, he said, City Hall’s initial estimate of the PILOT funding it would receive was “probably much higher than it should have been.”

Goldfield said he remains disappointed that the city did not receive the anticipated state aid, but he hopes this spring’s discussion will lead to reform in municipal revenue sources — which currently rely almost entirely on property taxes — in the near future.

“I do think there is a growing awareness that the property-tax system doesn’t work,” he said.

The Board will have to approve a budget by the beginning of next month, when the new fiscal year begins.