City officials this week said they'll end the fiscal year with a balanced budget, despite reports that Simi Valley's revenues are nearly $820,000 below what had been projected for 2007-08.

Jim Purtee, director of the Department of Administrative Services, said the revenue shortfall is primarily due to lower-than-projected revenues in development-related categories like taxes and franchise, and licenses and permits.

Still, mid-year expenditures are currently $2.1 million less than what the city expected to spend, ultimately allowing existing city programs and projects to stay in place.

"The city at this point is still meeting its service levels in all areas," Purtee said. "We're not looking at any program cuts, just looking at staff reorganization to make sure everyone's in the right spot to carry out the programs."

In what city analysts last June categorized as a difficult budget year, officials prepared for the downturn in the economy by instituting a soft hiring freeze and cutting general business expenses. But the economy slowed down more than they had expected, Purtee said.

"The city already had an idea of what was going to happen," he said.

"At that point we were seeing a slowdown in development. We'd come off a year of nearly $8 million in development fees. Then the following year, we were projecting $2.5 million. No analyst could have foreseen that it would slow down that much."

Mayor Paul Miller also said the city knew the shortfall was coming.

"This was not a surprise," Miller said. "But I think we're always pretty well prepared. We have good reserves and we always anticipate in advance what the potential needs of the community are going to be. This is not going to affect us terribly. It will be difficult to work with but I wouldn't call this critical."

To ensure the budget is balanced at the end of this fiscal year, the city of Simi Valley will continue to "take the minimalist approach" by holding back on general expenditures and analyzing vacant positions, officials said.

The city is currently working to put together a flexible resource team made up of staff at the mid-management level who can help other departments where there are vacancies, Purtee said.

"It's just one of those things," he said. "Any business anywhere in the state, whether in the public sector or private sector, will do what they can to get through this downturn. We're all going to be working more efficiently and working a little harder."

In the last 15 years Simi Valley has experienced a cycle of ups and downs in revenues- particularly because of a parallel cycle in new developments.

From 2003-06, Simi Valley had a boom in development revenues, where property taxes were also increasing at a rate of 8 to 10 percent. During fiscal year 2004-05, the General Fund had a onetime surplus in revenues of around $5 million, according to Purtee.

But officials agree that this year's local economy is beginning to reflect a "transitional period" for the city. Along with the slowing down of the nation's housing market, Simi is nearing complete build-out, so future developments will depend on the redevelopment of existing areas and on in-fill projects.

"We're moving from a developmentoriented city to a service-oriented city," Purtee said. "As cities grow, that's pretty typical."