Cloverdale's budget has reached a new low after struggling for years with the recession, coupled with a more recent loss of redevelopment funds.
City Council members were advised last week that the end of redevelopment has created a "structural imbalance" that will cause a projected $267,000 deficit in next fiscal year's $5.7 million general fund.
With barely any reserves, and after cutting staff by 25 percent over the past five years, city leaders say the hit is tough.
"For a small city like us, it's sizeable. It's quite a bit of money," Councilwoman Carol Russell said of the loss of redevelopment funding totaling $430,000 this year. "We're down to bare bones."
The City Council directed Interim City Manager Paul Cayler to look for potential savings as well as ways to increase revenues, ranging from tax hikes to fees for service, franchise agreements and grants.
More layoffs don't seem to be realistic to city leaders.
"I don't see reduction in staffing as an option any more," said Mayor Joe Palla. "There's no way the city could provide the most basic services if it reduces staffing."
Cayler will review the police budget, which he said accounts for about 70 percent of the general fund budget.
But the police department is already running relatively lean after cutting four positions in the past few years. It's now down to 13 sworn officers, including the chief.
Overall, the city's work force has been reduced to 39 employees from more than 50 at one time, and there have been no raises in five years. City Hall is closed on Fridays.