The city is in dire financial straits once again, and the City Council and staff will spend the next two Wednesdays examining new revenue sources and areas of the budget where they can trim some fat.

Last week, the council announced it would hold two mid-day meetings in addition to its regular sessions to work on the budget. For weeks, councilors have addressed the need to reduce expenses to match rapidly declining revenue. This week, staff came forward with several possible revenue sources to alleviate some of the pressure to gash the budget.

Finance Director Elray Konkel suggested the city may be able to bring in some additional money through several means, including dropping the business and operations tax threshold, upping development and building fees, and instituting a car-tab fee.

Businesses on Bainbridge are exempt from the business and operation tax for the first $250,000 in revenue. This threshold is significantly higher on Bainbridge than it is for its neighbors.

Konkel said most nearby cities have a threshold between $40,000 and $70,000, but Bainbridge’s will most likely remain around $100,000 at the lowest, if reduced, because the island needs as much small business activity as possible.

Konkel said building and development fees should be able to pay costs for the building fund, but currently, money from the general fund is needed to subsidize the fund. Konkel said one of the revenue sources considered would raise fees to represent 75 percent of cost, as opposed to the approximately 30 percent collected now.

These revenue sources could help protect the city from the situation that led to this latest round of budget cuts, Konkel said.

He planned to use grant proceeds from the Williams property and sale of the Vincent Road property to pay the bills in January, but those funds haven;t arrived. As a result, Konkel was forced to subsidize the general fund with a $600,000 loan from the city’s water utility fund.

Staff and the council decided that can’t happen again.

“It’s not something I want to do,” said interim City Manager Lee Walton. “It indicates we’re too close to the edge.”

While these revenue sources will may give the city some breathing room, most are future sources of funds and will not rectify current issues.

“Revenues are something we need to consider,” said Mayor Bob Scales. “But they are not going to solve immediate problems the city has. When we raise revenues, the demands of city administration and the council and community rose as well. We need to be looking now at what’s the sustainable level of business for the city with current revenues, and then cutting back to that point.”

The two workshops will help the council decide how much money needs to be chiseled from the budget and what will have to be reduced.

It remains unclear what will be cut. The amount needed to be slashed also hasn’t been decided. But, Walton said, everything is up for discussion – from employee layoffs to a shorter work week to program reductions.

One way of preventing layoffs, Konkel said, is a voluntarily reduction in hours. Some employees could work four 10-hour days, with other working four nine-hour days or four eight-hour days. He cited an example in which several employees voluntarily began taking a 32-hour work week during last year’s round of cuts; that saved two jobs.

Scales said this year’s round of cuts is going to be even harder for the council than last year, when he said most of the reductions weren’t from recurring expenses.

“Because we have declining revenue, or flat revenue, one-time cuts aren’t going to work in the future,” he said.

These reductions, while painful to all involved, will help the city tremendously in the long-term, Scales said. As the city gets closer to this summer’s biennial budget process, it will save a lot of effort if the city has an established, sustainable financial base.

“I know it’s going to be a difficult process, and I know they are going to be a lot of unhappy people at the end of the process, but it’s something we have to do,” he said. “The city has never done this before, to take honest look at its finances. I think there’s a willingness on the part of council and the city manager to say, it’s time we started living within our financial reality. Not some financial fantasyland where we want to do all these things when we don’t actually have the money.”