City council will need to cut hundreds of thousands of dollars from the 2015 city budget.

Council met Wednesday night to discuss next year’s budget. Each council member talked about the needs of their respective departments and offered estimations on how much revenue and expenses their department would generate.

Council concluded the difference between anticipated revenues and expenses could be up to as much as $1 million.

“The problem is revenue is flat and expenses are rising,” said Mayor Tom Donaldson.

The 2014 budget is $7.67 million.

While most revenues are expected to be about the same as this year’s budget, city clerk Mindy Gall said a big hurdle for the city next year is the lack of a surplus available to help balance the budget.

The surplus comes from a savings of prior year funds. The city used a $248,000 surplus from last year to balance its existing budget, although Gall said it has used more than $400,000 annually in years past.

However, no such revenue is an option for 2015.

“In the past we’ve been able to pull money from our reserve to balance the budget,” said Councilwoman Kathy Kline. “There’s nothing left in the savings.”

Much of the additional costs come from projected new expenses for the city’s three unions, which represent its police, firefighters, and nonuniformed workers.

Contracts with all three unions expire at the end of the year, and new deals will likely bring an increase in thousands of dollars for wage expenses, insurance coverage and other fees.

The problem for council members is they will not know how much an impact the new contracts will have until they are finalized. All three are still in negotiations.

Council members will review the requested budget items and introduce a proposed budget at council meetings on Nov. 18 and Nov. 20. The budget would be adopted in December.