Revenue for the city has been decreasing for more than a year, but it appears with the cuts made to the budget that the pattern of income and expense should hold for the rest of 2009, according to the city’s recently released mid-year financial report.

At Tuesday’s Finance and Personnel Committee meeting, councilors Bill Knobloch, Barry Peters and Kjell Stoknes asked Finance Director Elray Konkel and staff to come back to the committee with ways to cut enough costs to increase the end-of-year balance of tax-supported funds from $350,000 to $500,000.

Konkel said the rest of the year will be difficult if the city decides not to sell the eight pieces of surplus property. If the city manages to unload those lots, he said, there should be between $1.2 million and $1.5 million left in the general fund.

Peters said the report reinforced the notion that the city has to sell the surplus properties in order to have enough budgetary breathing room at the end of the year.

“We’re aware that there’s always the risk of month-to-month surprises on the downside, and we’d really like to find a way of strengthening our year-end projections in case there are surprises on the downside at the end of the year,” he said.

Completion of several utility projects, which are currently involved in legal challenges, is another main priority for the rest of the year, the report said.

As of June 30, the city had collected approximately 47 percent of the revenue for the year. Konkel said at this point, ideally half the revenue should be gathered. As a result, the 2009 revenue forecast dropped $1.2 million for the year, down to a total of $29,679,319, and the city has spent a good portion of the year attempting to reduce spending. The year-end forecast cuts nearly $1.1 million of expenditures off the revised budget.

Konkel said the city should end the year spending about 95 percent of the budget for the tax-supported funds, and spending in the utility funds should be nearly equal to the revised budget.

Peters, who is chair of the Finance Committee, said the report is a big step forward for the council.

“We’re still in the midst of a financial crisis nationally and locally, and this is the kind of report and analysis we need to make it out of the crisis,” he said.

Knobloch praised the work of the Finance Department, but said the city isn’t bringing in enough money to cover what’s going out.

“What we have is a flat revenue that doesn’t meet the budget requirements. So further cuts or changes have to be made in the budget that will allow us the capacity we need in order to deliver services to the people,” he said.