Iowa City councilors will continue to make large cuts to the city’s operating budget in an effort to balance capital projects and counter economic stresses.

Councilors agreed to cut $1 million from the budget over the next year because of economic constraints. Even without that cut, the approximately $50 million-plus proposed fiscal 2010 budget is already 16 percent smaller than the current operating budget.

“In order to reduce in one area, there needs to be level of discretion in other areas,” City Manager Michael Lombardo said.

Unless there are dramatic changes in the current budget schedule, he said, the deficit problems will continue to worsen.

“The initial budget identified a sustained budget deficit,” Lombardo said. “We’ve discussed the current situation and the need for reduction. With the addition of the fire station, we need to shift our goals.”

While councilors have funded the construction for the fire station, they will need at least $500,000 to staff it with 10 firefighters each year.

Funding for the firefighters for the fourth station will be placed alongside other projects in the budget and run through a priority-setting system to determine appropriate funding. The process is unique to this year’s budget because of money lost in economic downfalls and flood recovery.

This puts the city in a problematic position, Councilor Connie Champion said.

“If we’re going to staff the station, we’re going to run huge deficits. Are we just nuts to talk about hiring 10 firemen?” she said. “I’m not willing to cut 10 other staff members to fund the station.”

“There’s no joy in eliminating positions,” Lombardo said. “But cities have to be flexible, and as difficult as these decisions are, it doesn’t mean that we can cut services that are meaningful to the community.”

Councilor Matt Hayek suggested the council take money for the firefighters’ salaries out of the budget and put them into the priority hearing for a future agenda.

“It’s easy to make a decision to hire firefighters, but it’s hard who you’re going to cut to get there,” he said. “This is a unique year, even if we don’t fund the firefighters we will, in all likelihood, have to make staff cuts.”

Iowa City Mayor Regenia Bailey said removing the firefighters from the priority setting system may not be fair to other projects. The additional staff members would most likely score high during the priority process, anyway, she said.

“We should do a full-system priority setting,” she said. “This is frightening enough to our community, and to do a full budget weigh-in would be the fairest decision.”

Councilor Amy Correia noted the city is set to receive money from the federal stimulus package and those allocations may be used to fund projects that could get cut during the priority setting.

The council will continue budget discussions at its March 9 meeting.