HESPERIA -- The city is poised to work with a balanced budget during the next fiscal year, and a finance director is hopeful more building permits will raise additional money.

Assistant City Manager Brian Johnson said revenue is projected to increase 1 percent over last year, delivering $71.1 million to city accounts.

Expenses are projected to decrease by 1 percent, bringing the 2014-15 budget to $77.9 million.

Though the shortfall will be covered by reserves — spent only for one-time expenses such as a final $500,000 payment on water rights and $305,000 for new digital storage capacity — every major operating fund but one will retain cash reserves of at least 10 percent, Johnson said.

“The Fire Department is having some financial challenges, but it’s manageable,” he said.

The city’s fire services have been staffed under contract with San Bernardino County Fire since 2004, said Councilman Mike Leonard, a former city firefighter.

“The fire budget has always been an issue,” he said, explaining the current problem in his view seems to hinge on a lack of communication between County Fire executives and the city.

The city gets a bill from County Fire and has little control over what is presented, Leonard said, and the situation is similar to the contract for police services provided by the San Bernardino County Sheriff’s Department.

Leonard said he believes a reduction in property-tax revenue, due to adjustments in assessor valuations following the economic downturn and a lack of new development, hamper efforts to balance the Fire Department budget.

He is not optimistic things will turn around soon.

On the other hand, Johnson said after three years with no new single-family construction in Hesperia, the city received permit filings for 40 residences in the past seven months or so. He expects to receive construction permit requests for about 100 homes during the fiscal year beginning July 1.

One expense that was increased at council direction is the city’s Street Rehabilitation Program, Johnson said. Originally budgeted for $2 million, it was upped to $2.5 million. That will provide additional slurry sealing to affordably meet residents’ expectations for road improvements.

The City Council is expected to consider the 2014-15 budget at its June 17 meeting.

The Hesperia City Council meets at 6:30 p.m. the first and third Tuesdays monthly at 9700 Seventh Ave. in Hesperia.

Gary Brodeur may be contacted at 760-951-6245 or gbrodeur@vvdailypress.com. Follow him on Twitter @DP_gbrodeur.