The city’s primary “savings account” to use for a rainy day will dwindle significantly by 2008 if commissioners continue to spend at their current rate, the city’s top financial executive said Thursday.

Ed Mullins, the city’s director of finance, told commissioners at a study session that the balance in the city’s general fund would shrink from about $14 million to about $2 million by 2008 unless commissioners are willing to consider a spending slowdown or tax increase, or some other revenue growth occurs.

“In three to four years, it largely will be gone,” Mullins told commissioners.

The fund balance is accumulated by socking away money that was left unspent during previous budgets. At $14 million, the current fund balance is considered healthy. That represents about 30 percent of the city’s total general fund, which is the main account the city uses to conduct daily business.

Commissioners have said they’re comfortable with the balance dropping to as low 15 percent of the general fund. But Mullins said his projections show the city will start drawing down the fund for several years instead of adding to it as in the past.

Mullins’ comments gave commissioners pause as they considered ideas to tap into the fund balance in 2007 to tackle large projects such as street projects and additional homeless services.

“It sounds like it is going to be hard to do a lot of one-time expenditures out of that fund,” Mayor Mike Amyx said.

That could increase the possibility of the need for a tax increase to fund some of the projects that commissioners would like to add to the budget. A tax increase wasn’t a popular subject Thursday, but some commissioners wanted to leave the door open.

“It is important to have a budget that is lean and mean, but I think we need to have a budget that meets the needs of the city, too,” City Commissioner Sue Hack said.

City Commissioner David Schauner, though, said he wanted staff members to prepare projections to show how much the city could increase its spending without raising the property tax mill levy.

In other budget news, commissioners:

¢ Expressed an interest in adding a city auditor position in 2007. The position, which could report to city commissioners or the city manager, would help evaluate whether city spending programs are operating efficiently and providing the greatest value to taxpayers. The position would be in addition to a financial consultant that the city has plans to contract with this summer. The financial consultant would review the financing options the city has to tackle larger projects, and look for ways to lessen the effect they would have on tax rates. Commissioners don’t yet have cost estimates for either of the positions.

¢ Agreed to push back by a month or more the budget hearings related to the funding of outside agencies, such as the Ballard Center, Salvation Army and other nonprofit agencies. Amyx said he still was interested in funding the agencies but wanted to have more time to consider what the financial needs of city operations are before commissioners begin considering outside agency requests.

In the past, the outside agency funding has been among the first items commissioners have tackled. Amyx is proposing that it occur near the end of the budget process, which must be wrapped up by early August.

Consultant sought in city manager search

City commissioners plan to have a consultant hired by May 2 to help with the search for a new city manager.

Mayor Mike Amyx said Thursday that commissioners next week would vote on issuing an official request for proposals from national executive search firms. The firms have expertise in recruiting and would help screen applications for the position, which became open when Mike Wildgen was forced to resign in March after 16 years as the city’s top executive.

Amyx said commissioners would meet with the consultant in early May and discuss what they’re looking for in the next city manager. Amyx has said he hopes to have a new manager hired by the end of August.