DAPHNE, Ala. — The Daphne City Council asked Mayor Fred Small to shave off $500,000 from the new 2010-2011 fiscal year’s budget at Monday’s city council work session.

The general fund pays for bid awards and city projects. It was set at just more than $19.8 million last year, City Finance Director Kim Briley said.

The council appropriated an additional $800,000 throughout the year on various projects, so the total amount of expenses from the general fund was at approximately $20.6 million.

The estimated revenue for 2011 is $20.2 million, according to Briley, which equals an estimated $400,000 deficit. The council also is required by ordinance to take $500,000 from general revenue incurred throughout the year and place it into a reserve fund for capitol road projects.

According to Councilwoman Cathy Barnette, the city will fill the remaining deficit with funds from the general reserves, but the council does want the mayor to cut back in some areas to decrease the deficit.

“We have to make that up,” Councilman Derek Boulware said. “We’ve got a 4 percent problem, and it’s only going to grow next year.”

Small said the budget couldn’t be trimmed in many places.

“This is cut pretty thin,” he said. “There’s not much room for cutting. I don’t see where we can cut and operate for an entire year without coming back to the council. We’re in a very tight time. We’re very conservative when we spend money.”

The city incurred an extra $7.5 million in revenue from 2004-2009, but with a struggling economy, the city wants the mayor to cut back to make the line of expenses and income even for the next fiscal year.

Councilman Ron Scott did offer a “glass half-full” approach to the situation.

“We are fortunate that we do have reserves,” he said. “I agree though that we shouldn’t operate out of reserves. We aren’t like other (cities) that have to raise the sales tax to operate for a year.”

The city currently has $11 million in reserve funds, a finance department spokesperson told the council.

Boulware has been adamant about not taking money from the reserves to operate the city, but he did say that using reserve funds for capitol projects is acceptable.

“Using reserves for capitol projects is in line with healthy city management,” he said. “I do not have a problem with that.”

“If we cut $500,000 out of the budget, we won’t be able to operate,” Small said. “To keep putting $500,000 to capitol reserves to pay for roads, you have to keep cutting more services.”

Scott offered an idea to cut back on operating expenses for a six-month period and look at the budget again in hopes the city’s revenue is a bit higher and the city can put back some money into the budget.

Boulware continued his plea that the budget needs to be shaved to be in line with the expected revenue, and he wants a clear-cut plan for the entire fiscal year.

“If we are going to ask the mayor to make up $500,000, it needs to be a clear plan for a 12-month period,” he said. “Is it wise to continue to do something and not address the problem and hope it gets better?”

The council mentioned cutting back on their travel expenses and a potential “hiring freeze” on all vacant city positions as two ideas to cut back on the city’s budget.

Boulware stated at the end of the meeting that it is the job of the mayor to make tough decisions when it comes to budget cuts, and he has clear faith the mayor can make the correct decisions.

The next regularly scheduled council business meeting will be next Monday at 6:30 p.m. in City Hall.