The city’s declining revenue trend means cutting spending for the remainder of 2009. State law requires all municipalities maintain a balanced budget, and more severe cuts may be needed in 2010 and could include a wage freeze for all employees.

The Englewood City Council met in study session May 26, listening to department director’s recommendations on ways to cut spending for the remainder of 2009 by almost $1.4 million while having the least impact on service to residents.

City manager Gary Sears said, while revenues are hard to predict, the city is looking at a reduction in tax revenues of about $1.4 million for the remainder of 2009 and flat revenue collections for 2010. For that reason, Sears is asking all departments to establish a status quo budget with no increase in spending.

He noted, to achieve the 2010 goal requires cooperation from the three unions representing the city’s employees — the Englewood Employees Association, the Englewood Police Benefit Association and the Englewood Firefighters Association.

However, Sears did say he was encouraged by the response he has received so far from city employees in regard to the wage freeze as the union and city prepare to begin contract negotiations.

After almost three hours discussing the issues, councilmembers agreed with most of the recommendations for cuts in 2009. However, councilmembers also decided to delay taking up what are expected to be more painful cuts necessary to keep spending at the 2009 level in 2010.

Plans are to continue budget discussions at the June 8 city council study session. The council will have the benefit of the latest monthly financial report as they decide whether or not to make the proposed 2009 spending cuts. Councilmembers also said the June 8 meeting will include at least an initial discussion of recommendations to balance the 2010 budget.

The June 8 study session is open to the public and will begin at 6 p.m. in the community room located on the second floor of the Englewood Civic Center, 1000 Englewood Parkway.

The initial focus was the 2009 budget. Finance director Frank Gryglewicz noted the city’s primary revenue source is sales and use tax which is almost 79 percent of total revenues. He told the council that, based on the fact that sales and use tax collections and revenues in have dropped below forecasts for the last four months, he had revised the city’s revenue collection downward. The new forecast has reduced the estimated sales-tax collections by $1.8 million to about $21.8 million.

District directors listed proposed cuts that will make a combined spending reduction of about $1.4 million. The proposal also looks at using $400,000 from reserves to produce a balanced budget.

The option of taking money from reserves could be put aside if revenues increase, Gryglewicz said.

The majority of suggested cuts for the remainder of 2009 were to be achieved by reclassifying positions, not filling vacant positions and reducing spending for materials and equipment. Additional savings were realized because of factors such as lower fuel. Most departments also suggested cutting costs by reducing spending for training and overtime.

Councilmembers asked questions, talked over the recommendations and agreed to restore two proposed cuts — the $14,000 to keep the library’s security guard and reducing the fire department’s proposed cuts to the training budget by $15,000 so additional firefighters can be sent to paramedic training.