Where is Ann Arbor headed? City employees will find out Jan. 12

"Clearly, this is a time of additional uncertainty," he wrote. "Financially, no recent budget has allowed us to maintain the status quo. No previous budget has been as dire, however, as this."

To help keep the city's workforce in the loop, Fraser is inviting employees to a Jan. 12 meeting at the Michigan Theater. He plans to discuss the city's financial circumstances and what employees can expect in the months ahead as the city slashes its budget by millions of dollars.

Fraser said the meeting will start at 10 a.m. and will last until noon, including a question and answer session. City offices will be either closed or on reduced operating schedules so most people can attend, he said. The city is attempting to arrange for a video feed to allow those unable to attend to watch remotely.

The city is proceeding with implementing more than $3 million in mid-year budget cuts - including the layoff of 14 firefighters - that were outlined at a City Council retreat on Dec. 5. Many more cuts are on the way as Fraser has indicated a need to trim millions more.

Fraser told employees in his e-mail that - for the next few months - the city's management and budget staff will be working to prepare 8 percent spending reductions for the 2010-11 budget year that begins in July. Those reductions, he said, will be in addition to the 3 percent general fund spending cuts already included in next year’s financial plan.

Fraser said the challenges ahead will involve intensive staff work in January and February and work with the City Council in late February and March before the budget begins taking shape. He said research is still needed to address topics discussed at the council retreat, including a list of options for trimming the budget that are now summarized in a report Fraser attached with his e-mail on Monday.

"We expect this work will be substantial and will be prepared for and discussed with council in several meetings," Fraser wrote to city employees, indicating the first council workshop will be held at 6 p.m. Jan. 25. "Because this discussion is only starting, we must still be prepared with a more traditional budget for timely consideration by May. If and when any of these alternative ideas gain support and momentum, we will try to maintain the flexibility to respond appropriately."

Fraser said in the weeks to come, the city will give employees the opportunity to submit suggestions for reducing expenditures or modifying operations via the city's Web site.

Council Member Christopher Taylor, D-3rd Ward, has been asking for feedback on the city's budget situation in a round of e-mails to his constituents.

Taylor pointed out in an e-mail this past week that the city had projected general fund revenues of $86 million this year and now expects $82 million. Next year, the city had expected general fund revenues of $83 million and now expects an amount closer to $76 million.

"For the present, therefore, we must meet our revenue problem with an expense solution - deep cuts to city services and programs," Taylor said. "Over the next weeks and months, council and staff will consider our options and bring forward proposals to this end. There is no low-hanging fruit, no easy cuts."