Englewood City Council made some changes to its initial proposal to add items to the 2009 budget.

The council took up further budget discussion at the Sept. 29 study session, so any changes could be included in the budget document members consider for adoption.

After the study session discussion, the consensus was to follow the initial proposal to take $85,000 from the expected McLellan land lease payments — money from the lease of city owned land near the McLellan Reservoir — to restore the position of parks supervisor.

However, the council cited the existing economic climate for the decision to not take additional McLellan lease funds to help pay for the third year of the project to repair streets damaged by the extreme cold and blizzards of late 2006 and early 2007.

Instead, councilmembers asked the city manager to use $165,000 from the $90,000 in additional revenues the city expects to receive from fines and Pirates Cove, plus expected savings from a number of public improvement fund projects.

“I think we have consensus for this move,” Councilman John Moore said near the end of the budget discussion. “The anticipated lease revenues are about $500,000. We have consensus to take $85,000 from those funds to fill the park supervisor position. The remainder of the lease money will go to the long term asset reserve. Additionally, the staff expects a total of about $319,000 in additional revenues and savings from public improvement fund projects. We have consensus to take $165,000 of that money and reallocate it to the street rehabilitation project.”

These proposals will be contained in the 2009 recommended budget scheduled to be presented to the city council as part of the Oct. 6 meeting for consideration on first reading. If the budget passes without major modification on first reading, it will be considered for second and final reading at the Oct. 20 city council meeting.

State law requires the city pass a balanced budget. The council looked at the proposed budget at the Sept. 20 all-day workshop. Gary Sears, city manager, characterized the proposal as a status-quo budget with no new programs or new personnel. However, the forecast is for spending to rise about 4.4 percent because of the higher cost of materials, utilities and fuel.

Englewood, like the rest of the nation, faces the challenges presented by today’s economy. For the general fund — the money used for day-to-day city operations — the forecast is the revenues will rise about 2 percent to about $39 million but, at the same time, spending will increase about 3 percent to about $39.8 million. The result is about an $800,000 deficit.

The proposed budget draws money from the reserves to cover the deficit because state law requires municipalities to pass a balanced budget. The result of drawing on the reserves is the estimated reserves at the end of 2008 will be about $5.2 million or about 14 percent of the general fund budget. Drawing $800,000 from the reserves means the reserves are expected to decrease to about $4.4 million on 11 percent.

At the Sept. 2 workshop, the council accepted the proposed budget, including use of the reserves to cover the deficit, then suggested taking money from the McLellan lease payments to fill the vacant park supervisor position and allocate $165,000 to the street rehabilitation project.

Council also asked the staff to come up with about $100,000 in spending cuts so that money could be also be used for the street rehabilitation project.

However, at the Sept. 29 study session, Mayor Jim Woodward said in light of the unsettled economic climate in the country, he didn’t feel comfortable allocation money for the street rehabilitation fund at this time. However, he did agree it was necessary to fill the vacant park supervisor position and agreed the money should come from the McLellan lease payments.

“I am concerned about the state of the economy and I don’t feel comfortable with the forecast that we’ll only have about a 11 percent reserve at the end of 2009,” Woodward said. “I feel the financial market situation will have an impact on the city’s finances. We could face the challenges of making budget cuts yet this year. I think it is time to be fiscally conservative and hold onto every dollar we can.”

The council talked about the proposed lease payments on the McLellan property in Highlands Ranch. Moore said that one lease is signed and the other is still in negotiations and, under the economic climate, the city can’t be sure how much lease income will come to Englewood during 2009.

Councilman Wayne Oakley said he agreed with the need to be fiscally conservative but said preventive maintenance on the streets is important and urged the council to provide money for the street rehabilitation project.

Members of the council reached consensus and asked for their recommendations, to provide money for the park supervisor and to draw money from savings for the street rehab project, be added to the 2009 recommended budget.

At a glance

— Council changes proposals for ’09 budget

— Alter suggests funding sources for two items added to spending list

— Council to take initial vote on ’09 budget Oct. 6.