Gainesville employees may have to wait on or completely forgo a salary increase that would have been coming in January.

The deferred merit increases are just one of the ways that the government could make up for shortfalls in revenue, Gainesville City Manager Bryan Shuler told the City Council at a work session Thursday.

Eliminating employees’ pay raises could save the city’s general fund $305,970 in a tough financial year, Shuler said as he announced a plan to cut more than $2 million in city spending Thursday.

Although he said it did not seem likely that city employees would receive merit increases in January, Shuler said there will be no mandated furlough for city employees like the county government implemented this month in an effort to hedge revenue shortfalls.

"To me it makes little sense to grant a furlough and grant a pay increase," Shuler said.

The plan to cut expenses will come at a cost to city residents as well as city employees.

Planned sidewalk and road paving projects are going to have to wait until the city has a better idea of its revenue, Shuler said. The city also is planning to cut its funding to the Community Service Center.

City officials are looking for ways to cut expenses and mitigate the impact an economic downturn has had on this year’s budget. In the first two months of the fiscal year, decreased spending has taken its toll on the city’s revenues from the local option sales tax.

Sales tax collections for both July and August were lower than expected and were nearly $153,000 lower than what city officials planned to receive when preparing the city’s budget.

City departments that rely on incomes from user fees, like Parks and Recreation, the Chattahoochee Golf Course and Planning and Development, also are struggling with revenues.

Shuler said the city’s revenue shortfall could be as much as $1.1 million by the end of the fiscal year, and departments already are cutting their expenses.

"The bottom line of all of this is that now is the time that we need to be making adjustments ...to make sure that we can continue to insure the fiscal health of our city," Shuler said.

Along with deferring pay raises, the city manager announced plans to keep open three administrative positions and hold off on hiring employees for eight other vacant positions throughout the city.

Keeping those positions vacant until the end of the fiscal year in June would cut city expenses by about $500,000, Shuler said.