As Dominic mentioned earlier, Mayor Mike McGinn held a press conference this afternoon to formally announce a deficit in the city's general fund of at least $10 million for 2010, and a deficit of at least $50 million for 2011 (not including the $70-million-dollar shortfall Seattle City Light is projecting for 2010).

"We don't have the revenues we had in the past," McGinn says, "we have to reexamine how we handle the budget... it's pretty unprecedented."

McGinn stressed that the city isn't facing a "one fund" problem, every department—from the Department of Planning and Development to Seattle Public Utilities—is generating less revenue. Basically, the city has lacked long-term budget planning for years, and has no standardized financial policy for its departments. On top of that, real-estate excise tax revenues are down 68 percent, and SDOT and Parks and Recreation are facing shortfalls, and the city—the nation—is facing the worst economic recession since the Great Depression.

Basically, our finances are fucked—but McGinn reiterated they aren't as fucked as the county and state budgets (I'm paraphrasing). Tools used in the past, such as the city's Rainy Day Fund (which currently holds less than $10 million) won't fix the situation. So what's the plan of action?

To address both long and short term problems, McGinn is reorganizing management by creating a new City Budget Office (CBO), headed by Beth Goldberg, and a Finance and Administrative Services Department, directed by Fred Podesta. Glen Lee is taking over as the city's finance director. McGinn wants a complete financial assessment of all city funds by the end of April. From there, the CBO will prepare long-term financial plans while the mayor's office notifies departments of mid-year and 2011 reduction levels, which, the mayor stressed, will minimize layoffs as much as possible.

With regard to Seattle City Light, the mayor plans on refinancing outstanding debts, setting up a Revenue Stabalization Account (RSA) as insurance against future revenue shortfalls, selling surplus properties, and setting future rates to meet projected capital needs. The mayor is also considering a temporary surcharge to fund the RSA.

"It's a fairly gloomy picture of where we stand, financially," said the mayor, adding, when pressed, that "specific cuts aren't the focus of today's briefing. We just wanted to get everything on the table."

"Dire" isn't the word to describe the city's predicament, the mayor said. "Serious" is the word. Look for "serious" cuts coming at the end of April.