The Ann Arbor City Council will meet for a special all-day retreat on Saturday to talk about budget challenges facing the city.

Tom Crawford, the city's chief financial officer, said the meeting will include an updated budget forecast presented by City Administrator Roger Fraser. The last time Crawford offered a financial outlook in August, he said the city could potentially face a $5.8 million deficit in the next fiscal year beginning July 1.

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Tom Crawford, Ann Arbor's chief financial officer, offered a report to the City Council in August, warning of a looming multimillion-dollar budget deficit. Ryan J. Stanton | AnnArbor.com

The retreat will mark the start of budget deliberations for 2010-11. City officials also plan to discuss priorities for the next year.

"We plan on covering where we are financially, kind of the status for 2010," Crawford said. "I had talked with council back in August about some concerns we had about revenue, so we're going to be updating them on that and giving a status report."

By the second City Council meeting in April, the city administrator is expected to present a proposed budget for 2010-11. The council is expected to act on the budget by its second meeting in May.

Cost-cutting proposals currently on the table include laying off 14 firefighters, shuttering the city's senior center and closing Mack Pool.

Mayor John Hieftje said the loss of pharmaceutical giant Pfizer in Ann Arbor meant the loss of 4.75 percent of the city's property tax revenue, which dealt a heavy blow to the city's general fund budget.

"Ann Arbor is maybe a little better off than other cities in the state, but we're all in the same situation to some extent," Hieftje said. "The combination of falling property values and state revenue cuts are really starting to take a toll over time."

Saturday's retreat will be held in the main conference room at the city's W.R. Wheeler Service Center, 4251 Stone School Road. The meeting is expected to last from 8 a.m. to 4 p.m.

Ryan J. Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.