Council members rejected the proposal in a 4-2 tally.
In anticipation of a $675,000 budget shortfall by the end of 2013, Hillsboro Council has been seeking ways to close the gap. One option was to utilize the Paint Creek Joint EMS & Fire District, a move that would have saved a third of a million dollars in the first year.
Council nixed that idea, however, 4-2 vote, Wednesday.
Councilman Peter Pence said the city now has to consider other options: "The first thing that'll be looked at before layoffs are considered would be all non-essential items, probably Liberty Park, Shaffer Park, and there will probably be certain street projects that were planned that will have to be put on hold."
Pence was one of two votes in favor of the proposal, which would have eliminated city firefighter positions but also given them the option to apply for jobs within the Paint Creek Joint EMS & Fire District.
He said layoffs are possible for various city positions as well as fire staff.
"Now we have to figure out how you can keep enough (firefighters) on staff to where you can adequately respond to certain emergencies that would arise," said Pence.
The finance committee will meet at 8 a.m., Friday, in the administration building to consider revisions for the 2012 budget.