National reports may be suggesting an upswing in the economic downturn, but for the Charleston city government, the financial situation looks bleak for the next several years.

City Comptroller Heather Kuykendall is predicted budget deficits for the next five years that worsen as time goes on.

According to the estimates, expenses in 2011 are projected to hover around $11.5 million, while revenues are projected to be around $11 million. By 2015, expenses are projected to be around $12.5 million, while revenues are estimated to be around $11.3 million.

Charleston city government typically ends each budget year with a balanced budget, which makes the estimates particularly grim.

“Balancing the budget will be difficult,” Kuykendall said of the coming budget year, which begins in May.

She said projections beyond 2011 are less reliable. Kuykendall delivered the news to City Council members during the council’s annual two-day retreat, which started Thursday and concludes today. The retreat is intended to facilitate ideas for the future, as city departments begin planning the budget.

Kuykendall said the recession has decreased local and shared revenues, with both revenues stabilizing recently.

She said sales and income tax have decreased from a year ago. Health insurance costs have increased, while the federal and state governments continue to extend unemployment benefits, which the city has to cover.

The biggest loss is in property tax usage. Kuykendall said much of the property tax levy would go toward pensions for police and fire personnel.

In fact, 20 percent of the levy covered pension costs in 2003. In 2010, 60 percent of the levy is projected to cover pensions. The increase in pensions will cut almost $1 million in property tax usage for the city during the next five years, according to Kuykendall’s estimate.

“We’ll get through it,” said Mayor John Inyart. “But it will be tough.”

Revenue in the Motor Fuel Tax Fund is also declining. Inyart said the decrease could hinder the city’s ability to do different road projects.

Kuykendall said she wants to figure out expenses on payroll for the coming months before obligating money for capital projects.

City Manager Scott Smith intends to institute a temporary, but full hiring freeze during the spring for full-time and part-time workers.

He said $60,000 in tax revenue that has came to the city this year was gone before the property tax levy was formulated. This means any increased revenue will have to come from cuts made by the departments, Smith said.

“The worse is yet to come,” Smith said.

The public works department, which is the city’s most extensive department, will look to do smaller maintenance projects in the coming year instead of major capital projects, said Curt Buescher, director of public works.

To do this, Buescher said the department would limit contracting work and rely on the Motor Fuel Tax to conduct maintenance projects.

He said the reliance on the tax deters direct spending on equipment and resurfacing resources, such as concrete.

Buescher said the department would be able to continue some capital work because the general fund covers some of the public works staff.

“We will be able to continue to make improvements to our city and infrastructure in-house,” Buescher said.

The recession and deficiencies in property tax may make the city more dependent on the 2010 census for revenue.

City Planner Steve Pamperin said the census does have an effect on shared revenues, adding each resident represents $300 in revenue for the city.

The census count starts in April with redistricting happening in February 2011. Pamperin said the city submitted to the U.S. Census Bureau 2,000 addresses that needed to be changed or corrected. He said Eastern’s enrollment has also increased by 2,000 from 10 years ago.

This combination, Pamperin said, leads him to believe that Charleston’s population will change from 21,000 to 23,000.

He said the city would need to have to engage off-campus students to ensure that they properly fill out the census form. The city is working with the Eastern administration to engage off-campus students, along with making sure on-campus students are counted.

Stephen Di Benedetto can be reached at 581-7942 or at sdibenedetto@eiu.edu.