DAPHNE, Ala. — City Finance Director Kim Briley’s told the Daphne City Council that by her projections, there will be scarce reserve funds left by 2015.

If the economy doesn’t turn around by 2015, the city will see a $1.5 million increase in revenue, but there will be around a $5 million increase in expenses, Briley said.

“In four years, we won’t have any reserves, according to Ms. Briley’s projections,” City Councilman Derek Boulware said.

“The only thing to do is stem it down.”

The city currently has $11 million in reserve funds, Briley said.

Council members stated that Briley has often been conservative and cautious with her projections, often assuming for less revenue than what the city incurs.

Council members raised the idea of a hiring freeze, and the estimated cost it would save the city is around $850,000 for the 2010-2011 fiscal year.

“Even at the national level, finally someone realized you can’t keep growing employees, growing salary and growing benefits,” Councilman August Palumbo said, also requesting that a formal ordinance be made and put forward for an upcoming council business meeting.

President Barack Obama announced Monday a two-year pay freeze for federal workers because of high annual deficits.

The Daphne council is looking into a similar action with any vacant positions that may come throughout the year, but there are some positions that the city is required to fill either by law or by a grant they took on.

Palumbo said that a hiring freeze is a way to avoid lay-offs, something the city of Daphne successfully avoided last year.

“We were able to not lay off anybody (during the last fiscal year), and I would like to do it again,” Palumbo said, also citing that the city of Gulf Shores had to lay off around 40 people during last year’s fiscal year.

The council also discussed putting extra money into investment. The city currently has around $3 million invested with Eagle Management Investments at around a 6 percent interest rate, and Boulware said if the city were to hypothetically double the amount invested, it could double the amount of new revenue for the city.

“If it drops from 6 percent to 2 percent, it’s still more than what we’re making right now,” Boulware said.

While the council did look at ways to keep from balancing the budget with reserve funds, Councilman Ron Scott provided a positive side to this year’s budget season.

“Last year we agreed to balance the budget with $600,000 (from reserves), and this year we are proposing only around $300,000,” he said.

The purpose of the work session was to prepare for the upcoming fiscal year’s budget, and at the Nov. 8 work session, council members asked the mayor to shave off around $500,000 from last year’s general fund budget.

The general fund pays for bid awards and city projects, and it was set at just more than $19.8 million last year, 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 approximately $20.6 million.

Estimated revenue for 2011 is around $20.2 million, according to Briley, which falls around $400,000 short of last year’s expenses. 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.

While the council is looking for ways to cut back, there is hope the city that the city will see a spike in sales-tax revenue with Dick’s Sporting Goods and Publix opening in the near future.