The City of Issaquah is concentrating on reducing how much it spends on supplies, equipment, staff, and all items and programs it considers non-essential as a way to balance their budget in this time of falling revenues.

That was the clear message from Finance Director Jim Blake’s quarterly financial report to the council on Tuesday night.

In a preface to Blake’s report, City Administrator Leon Kos said that according to forecasts, the city would end 2009 with a $1.5 million reduction in revenues and a $1.6 million reduction in expenditures. He said the city was deferring the

Kos said the city was deferring the purchase of supplies and equipment, delaying the appointment of new staff to vacant positions, and suspending staff training that was not a legal requirement.

The council will consider continuing to delay the filling of vacant positions for the rest of the year, if conditions do not improve.

“Our main goal is to minimize the impact on services,” he said. “We are trying to be able to defer expenditure without significantly impacting the community.”

He said that the prudent expenditure policies of the city and the council had made the organization better able to weather the economic storm.

“No matter the economic climate, we are well prepared the keep the budget balance.”

Blake said that the biggest fiscal problem facing the city continued to be the reduction in revenue from building permits, and the reduction in related sales tax revenue.

“We were counting on the Issaquah High permits (for construction of the new high school building) to come in for April,” he said. “But it looks like that might not be until May.”

Blake said he was seeing what could be done to increase revenue from the city’s purchase of treasuries and investments.

Councilman John Rittenhouse questioned whether or not cuts to expenditure on police in the city would threaten public safety.

Kos and Blake responded that those cuts were not the result of reducing patrol hours.

Councilman David Kappler said that he was concerned that a policy of delaying work might compromise the ability of the city to be well-positioned once the economy rebounded.

“We want to be ready with the central Issaquah plan, whenever the economy gets better,” he said. “And so I would be concerned about doing things like delaying code amendments. I think we should perhaps dig down into our reserves of funds to get that work done, if that’s what it takes.”

Blake said that there were various options to be presented to the council for the 2010 budget, the decisions on which would need to be based on the council’s priorities.

Just what those priorities are will be one of the many topics of discussion at this Saturday’s annual City Council goal setting retreat.