As the economy continues to pitch and roll, the city of Langley is keeping a tight grip on the $4 million in its pocketbook.

There are no major improvement projects, and no raises for city employees in next year’s preliminary budget. In fact, hours for most employees would be slightly reduced, and three contract positions would be eliminated, Debbie Mahler, city director of finance, said Thursday.

“We’re trying to get ahead of the curve,” Samuelson said. “It’s fair to say you’ll see some reductions in services, but not dramatically.”

A public hearing on the proposed 2010 budget will be at next week’s city council meeting,

6:30 p.m. Monday, Nov. 16, at city hall on Second Street.

By law, the city must approve a balanced budget by Dec. 31.

“We’ll be working on it right up to the deadline,” Samuelson said.

The proposed budget total for next year is nearly $4.4 million, compared to this year’s budget of $3.8 million. By contrast, the city spent nearly $4.8 million in 2008 and nearly $4.5 million in 2007.

Mahler said the primary reasons for an anticipated reduction in revenue is the stagnate housing market and the corresponding decline in building projects.

At the same time, the retail sales tax, which showed a slight increase for the first half of this year, “has been heading straight downhill ever since,” she added.

The closing of several Langley businesses this year, including Linds Langley Drug, has contributed to the sales-tax decline, she added.

Meanwhile, costs for several services the city requires, such as insurance and electricity, have continued to increase.

“We’re watching this year really closely,” Mahler said. “If anything changes, we’ll make some adjustments for 2010.”

In the proposed budget, there are no merit or cost-of-living salary increases in 2010 for any of the city’s 17 employees.

And all those employees covered by the general fund would be required to take one day off without pay per month, Mahler said. That’s everyone except those in the public works department.

One full-time-equivalent position in the finance and records department, and money for emergency planning and energy conservation management, also would be eliminated for next year.

The latter means the termination of part-time contractors Lynn Sterbenz, director of emergency management, and Linda Irvine, resource conservation manager.

Samuelson said the city is hoping to get a grant to reinstate Irvine’s position.

“It’s very uncomfortable to affect people’s lives,” Samuelson said. “But we’re just like everybody else around us right now. You see it everywhere.”

Meanwhile, water and sewer management, previously contracted out, has been taken over by the public works department, along with some janitorial duties, Mahler said.

She said all the payroll revisions would result in an overall 5-percent savings.

The only major new project in the budget is a joint effort to improve the parking area at Christian & Missionary Alliance Church, which will be more than 86-percent funded by a$415,000 federal grant.

The city plans to pave, landscape, install lights and upgrade the stormwater system at the church at Sixth Street and Cascade Avenue.

The project is expected to be completed next spring, and provide 50 additional parking spaces for downtown visitors and Island Transit commuters.

The 2010 general fund is projected to be $1.37 million, compared to $1.5 million this year and also lower than the two previous years.

The city plans to spend more than $633,000 on streets and storm drainage next year, compared to $252,000 this year and $874,000 in 2008.

The water fund has been increased by about $57,000 to about $499,000 for next year, and the projected sewer fund is up about $100,000 to about $430,000.

A new $143,000 stormwater utility fund would be established to incorporate an increase in rates approved this past September, the first hike in 15 years.

Stormwater management in the city has been operating at a deficit for years, and has been subsidized by the street fund.

On the plus side, eliminated from next year’s budget will be money for the Langley Marina, which was taken over this year by the Port of South Whidbey.

Samuelson said the city’s goal is to build the city’s annual cash carryover from the previous year back up to 10 percent of the general fund budget in three years.

“The assumptions about money are really different than they were a year ago,” he said. “We all have to learn how those assumptions have changed.”

Copies of the 2010 preliminary budget are available at city hall. Call 221-4246 for information.

While the proposed budget for next year is slightly higher than this year’s, it’s lower than the budgets of 2008 and 2007, Mahler said.

“Everybody’s kind of pulling together to try to get through this,” she said of the recession that the city, and everyone else, has been unable to escape. “It doesn’t look like the economy is coming back very fast.”

Mayor Paul Samuelson said officials recognized during the summer that the city, like other governmental agencies, is facing financial trouble ahead.