The Port Hueneme City Council today likely will approve a $45.4 million annual budget that has been trimmed to help stabilize a chronic deficit but doesn't severely cut municipal services.

"This is a back-to-basics budget," City Manager David Norman said of his first spending plan since being hired in December.

The 2007-08 general fund budget calls for $15.9 million in expenditures and about $15.2 million in revenue. The city will use about $700,000 in redevelopment money to plug the gap, Norman said.

The funding remedy has been used before by the city, which is faced with a general fund deficit for a fourth consecutive year. "However, the capacity for the redevelopment agency to continue doing so is rapidly approaching its limit," Norman said.

The city has about $3 million in cash reserves, he added.

Port Hueneme has no auto malls or major shopping centers to help generate sales tax revenue, and little room to develop such projects. Meanwhile, city salaries and benefits continue to increase.

"We're in a situation where we can't keep doing things at the same level," Councilman Jon Sharkey said. "We're in the same squeeze as everybody else, but we can't increase our revenue. If you don't increase revenue, then you have to cut on the other side."

Norman gave the council a budget with a $1.7 million shortfall about a month ago. After the council called for more cuts, city staff members went back and took out another $1 million. The work has delayed the approval process beyond the July 1 start of the fiscal year.

Every department would feel the pinch if the latest budget proposal is approved, including police, which would get nearly $5.7 million of the general fund money — a 3 percent decrease from the previous year. The budget does away with four vacant positions — one each in the police, landscape maintenance, street maintenance and solid waste departments.

Police staffing would revert to its 2005-06 level, Norman said, but the department's gang and narcotics unit would not be cut.

By and large, the public would not see any significant changes in service, Norman said.

"There will be some impacts in street and landscape maintenance," he said. "Some projects will take longer to complete."

Council members hope to eliminate the deficit by the 2009-10 fiscal year by finding new sources of revenue.

The city will likely increase fees and utility charges in the next year, Sharkey said. Mayor Maricela Morales said the council also is considering asking voters to approve a tax next year to help eliminate the deficit.