The Niles City Council will need to do some soul-searching and number-crunching this summer to determine where it will drop its hatchet next fiscal year.

Facing $535,000 in cuts to balance its fiscal year 2012 budget, the council debated major reductions Monday during a Committee of the Whole meeting, including eliminating funding to the Downtown Development Authority (DDA) and the summer parks program. Also proposed is reducing the Fort. St. Joseph Museum director from a full-time to a part-time position and cutting the police and fire departments’ budget by three employees or the equivalent, among other reductions, like road improvements.

The City of Niles has been in the red in recent years; however, Administrator Terry Eull said he was anticipating getting lost state revenue back after the recession. He explained that the city will be receiving $450,000 less in revenue than last year

Eull believes the governor eventually wants to “do away” with statutory revenue sharing, and forewarned the city may need to decide what it wants its future to look like.

He said the city will not know until a year from now exactly what it will receive from the state, and it needs to be prepared.

“It’s not getting better,” Eull said. “It’s bleak. We’re in good shape financially in the city; we have a revenue problem.

“We’ve cut staff like crazy,” Eull explained. “A lot of people don’t know that. We aren’t replacing people.”

The city currently has 110 full-time employees, down from about 150. Eull said the street department is reduced “about as far as we can go;” the police department is down five people (22 percent); and the fire department has cut two employees.

Fourth Ward council member Tim Skalla suggested going to voters for a millage to fund city roads.

Calling it a “bad idea,” Eull said the likelihood of it passing is slim, especially with the county pursuing a road millage.

“You have to prove to them (the citizens) you’ve done everything you can to cut costs,” Eull said.

Eull suggested seeking revenue from utility departments and from the Southeast Berrien County Landfill, although not this year.

Second Ward council member Dan VandenHeede said the council needs to look “at the big things,” referring to the NPD, NFD and administrator costs.

“I know these are things that people don’t notice right away,” he said. “…unfortunately, they are 56 percent of our budget. Those are the things that will have the biggest (financial) impact.”

Niles Police Chief Ric Huff said the NPD is considering not replacing the captain when Huff replaces Eull, who is retiring in the fall.

VandenHeede said the Fort St. Joseph Museum and DDA are both services that attract people to Niles.

“You can’t argue what they’ve done,” Eull said of the DDA, “(but) do you want to cut cops on the road?”

“I think people would notice big-time if we didn’t have a DDA or the museum,” VandenHeede countered. “They don’t notice as much if a cop is on the street.”

Second Ward council member Bob Durm said that one of the city’s primary purposes is to supply public safety to the community.

“We need to take care of our residents and our citizens,” he said. “If tourism goes down a bit, so be it. I really worry about reducing (officer) numbers to dangerous levels.”

Eull clarified that he is not proposing closing the DDA or the museum.

“Most departments have made sacrifices,” he said. “And the museum has not made sacrifices.”

Mayor Mike McCauslin reiterated Durm’s sentiment that public safety is a city priority.

“I think we are all hopeful that two, three years down the road there are going to be improvements,” McCauslin said.

Third Ward council member Betty Arndt agreed.

“Sometimes you have to feel a little pain to realize what’s important to you,” she said. “If funds have to be cut for the DDA or our summer parks program, maybe it’s time for the citizens to take over. I really don’t want (to cut) fire, police and roads. Everything else is frosting.”

No decisions were made at the Monday meeting.

The council may schedule another Committee of the Whole meeting in June or July. It will then re-evaluate the budget, which must be passed by the end of August.