Back in early May, the city’s administrator and finance director told the council that revenue assumptions for sales tax, real estate taxes and building revenues would remain “flat” through 2008 and 2009. The primary source for the look into the future was the state’s economic report issued in January. At the time, it seemed overly optimistic to some.

As last year progressed, revenue dropped gradually and then bottomed out during the last two months with a shortfall of about $1 million. The downward trend was aggressively noted during the last six months of the year by at least three members of the council and a dozen or so activists who consistenly abraded the administration during the year for not acknowledging the obvious.

During Tuesday’s Finance Committee meeting, Finance Director Elray Konkel said he took full responsibility for the inaccuracy of his revenue estimates while reporting that the city’s year-end cash balance was $1,170,929 in the red. The problem? The city’s revenues were down $1.6 million than the 2008 budget had estimated.

Konkel said it was too early to know what January would bring, but he said the city’s cash flow at the end of the month would be positive. Then he offered some mitigative measures going forward, including: a 15 percent reduction of operation expenses; developing a monthly cash flow model; and delaying all non-essential contracts until May.

What to do? Council member Barry Peters said he was under the impression there would be a positive balance at the end of the year when he approved the 2009 budget last month. He then called for an analysis on how the shortfall would impact the financial plan and a more effective way to distinguish trends.

One way might be for some council members to be more open to the ideas and subsequent warnings of others.

As for Konkel, he seems to have learned his lesson. After saying that the city has yet to reach the bottom of the financial barrel, he said that in the future it might be better to underestimate the city’s revenue and overestimate its expenditures. Hopefully, there are others in the city who are listening. Too.