Lafayette has a budget most cities would envy.

The city finished the previous fiscal year with a $219,000 surplus to supplement its $9 million reserve. It is one of only a few in California with a top credit rating.

But things will not always be so rosy, city officials say, and on Monday they will ask the council to trim more than a half-million dollars, or about 5 percent, from the budget.

"To some extent, the recession that's been hurting business over the last 18 months to two years is finally landing upon the cities, so looking forward it's pretty simple," said City Manager Steven Falk. "We think that revenues are (going to) increase more slowly than expenditures, and over the long term that's not sustainable."

The city's expenditures will increase 3 percent each year for the next five years while revenues will only increase 2 percent annually, according to the staff report prepared by Falk and Administrative Services Director Tracy Robinson.

That would create an average annual deficit of $535,000, the report said.

Among the staff's recommendations to close the gap:

  • Eliminating the city's K-9 police officer, saving $225,000 per year. Nearly three-quarters of the officer's calls are outside Lafayette, Falk said. The city would purchase two police motorcycles to increase traffic enforcement.

  • Reducing redevelopment agency and planning staff in response to a decrease in public and private construction projects, saving $146,500 per year. The recommendation includes reducing the city's full-time community development director position to a part-time special projects manager.

  • Cutting out downtown "promotional" improvements such as banners and decorative lighting, saving about $80,000 per year, while working with business owners on alternative funding.

    The city's single biggest expense is its police contract with Contra Costa County. The council this year explored alternatives to that contract, out of concern the price could skyrocket because of rising retirement costs.

    Police costs held flat this year, and staff members predict they, and other expenses, will increase in subsequent years by 3 percent.

    The council can always make additional budget changes if the cost of the contract does increase beyond projections, said Councilman Don Tatzin, a member of the council's finance committee.

    "The advantage of doing what we're doing is that we're doing it with enough lead time so that if things don't turn out exactly like we are anticipating, we can make further adjustments and still not be in any danger," Tatzin said.

    Contact Jonathan Morales at 925-943-8048. Follow him at Twitter.com/sosaysjonathan.

    If you go

    What: Lafayette City Council
    When: 7 p.m. Monday
    Where: Community Hall, Lafayette library