Councillors will start budget deliberations next Monday to make up a $1.8- million shortfall.

Staff will present council with two options on cutting and reallocating funding, which could include staffing adjustments, said Simon Farbrother, the city’s chief operating officer.

The deficit comes after a job evaluation survey the city performed earlier this year that showed they had to spend close to $2 million to pay market value to employees.

Last December, council set a three-year budget. They will have to reopen the operating and potentially the capital budget to achieve cost savings.

One option available is that councillors could choose to either charge interest on or sell off land assets, Farbrother said.

The money from a sale would not go directly to paying off the operating budget deficit, but instead be placed in a bank account and the interest could help relieve a portion of the shortfall.

They could also start charging interest on the land, effectively taking the money they would make on the sale on the land.

“If that money was sitting in a bank account, it would be accumulating interest,” Farbrother said.

He estimated that the city could make about $400,000 annually on interest, which would go a long way towards paying off the debt.

The flip side of the option would be that when the city sells an asset, they would not make as much profit on the sale.

“We’d recoup our initial capital investment then and collect interest now,” Farbrother said.

A likely outcome is an amalgamation of the two options. There are one or two parcels of land that the city could make a profit on now, even with a softening of the overall market, Farbrother said.

“There is significant interest in a few parcels,” he said.

Mayor Brenda Halloran cautioned against jumping the gun on land sales.

“We’re not putting the land on the market yet,” she said.

Council also received a briefing note outlining the other actions they could take to cover the deficit.

Council’s options:

• Reducing leaf collection to one pick up on each street.

• Reduce the city’s portion of funding to Communitech by $30,000.

• Move the west-side library project funding to 2011.

Staff also listed possibilities for new revenue generation, including advertising on corporate vehicles, selling overnight parking passes, and increased fees for development and business licensing.

The city could also upload some roads to the region and implement charges for faulty or false fire alarms.

Budget deliberations will begin next Monday, Nov. 24, in council chambers.