The City Council this week set the wheels in motion for the conclusion of a short-term budget-cutting process that began at the end of January.

But once the council approves the budget cuts developed over the past month, the work of reinventing the city, as interim City Manager Lee Walton calls it, will begin.

Last year, the council undertook a similar process, consisting of short-term reductions with the intention of later studying and adjusting the city structure.

But the council never made it to the long-term examination.

Some councilors were made uneasy by the nature of some of the latest cuts, should they stand on their own. They made clear that this is only the beginning of a larger-scale reorganization of the city.

“There needs to be a trust between the council, community and staff that we’re going to do this really well, and this is the first step,” said Councilor Kirsten Hytopoulos.

The meeting began with the majority of the cuts – involving leaving open positions vacant, and decreasing several community services contracts for the year – representing short-term savings. Though the vacancies would save money this year, they would likely be re-staffed in the future, and community service contracts could again be increased should the city’s financial situation improve.

The council used Wednesday’s meeting as a way to begin the reinvention. The council decided to eliminate the deputy police chief position and replace it with a captain, who wouldn’t be a union member, so he or she could investigate internal matters or complaints against officers without creating a conflict.

Should one of the department’s five lieutenants prove qualified, he or she could be promoted to the captain spot. The lieutenant position would not be replaced.

In the public works and planning departments, the council instructed the administration to combine the positions of public works director, city engineer and deputy planning director into two positions.

It was decided that the positions of human resources administrator and water resources program manager would be left vacant as well.

The largest organizational shift came in the form of shuffling the city’s information technology department. The council decided to merge IT with one of the other internal departments, most likely finance. IT director Steve Miller would take a demotion down to IT manager, which carries with it an approximate $20,000 annual pay cut.

The council also asked for reductions in the budget for IT, up to 10 percent.

Miller said any further reductions would hurt the department.

“We’re kind of at bare minimum right now,” he said.

The package presented by council doesn’t include any layoffs, but does set a target of $80,000 of savings in voluntary work-week reductions. This goal represents approximately seven or eight employees agreeing to a 32-hour week. With the intention of enticing more employees to volunteer, the council voted to allow those workers to retain 100 percent of their benefits.

Overall, the council presented cuts totaling more than $1 million, fulfilling their goal of $1 million this year to begin stocking reserve funds. Another $1 million will need to be shed from the 2011 budget, which will come during the biennial budget process later this year.

The council’s decisions Wednesday were not final. The public will have a chance to comment on the proposals Tuesday from 7 to 9 p.m. at City Hall. The following evening the council will consider approving the proposals at its business meeting.

Expected to face the hatchet, community service organizations were spared for the most part by the council.

However, councilors agreed that it wasn’t smart to pay expenses like rent and utilities for private institutions such as Health, Housing and Human Services and Bainbridge Island Arts and Humanities Council.

“I don’t think its appropriate for the city, given its financial situation, to fund office space for these organizations,” said Mayor Bob Scales. “It doesn’t make sense to use public dollars to pay the rent of private organizations.”

Instead, the city and the community service organizations will work together to determine whether or not it would be feasible for them to move into City Hall.

HHHS offered to take $7,000 less in funding and is also forming an internal task force to diversify funding options.

The two community service organizations taking the biggest hit in this year’s budget are the public arts program and the Housing Trust Fund.

The council voted against giving the $150,000 it distributes every year to the Housing Trust Fund, money used to fund affordable housing projects. The council could elect to continue with the funding next year.

The public arts program, which currently takes 2 percent of capital project spending for creation and maintenance of public art, will not receive any contributions from the general fund until an appropriate level of funding can be decided.

Funding for BIAHC, long a candidate for cuts in this process, was kept at its current level. Councilor Barry Peters proposed reducing the organization’s funding by $43,000, down to $136,000, but it was not seconded.

“They’ve taken tremendous hits in the last two years, much larger than any other community service organization,” said Councilor Kim Brackett. “They have really taken a huge hit, yet continued to deliver services to the community in an efficient manner.”