Bend City Manager Eric King told city councilors and other officials Friday that the city budget has stabilized after a tumultuous five-year period since the start of the recession.

During that time, the city reduced its staff by nearly 20 percent, or about 110 jobs, through a combination of layoffs and attrition, King said.

“I think the good news is the city is well-positioned financially,” King said. The city spent the last five years building its reserve accounts and evaluating its infrastructure needs. “It’s nice to come here, head held high, a little different from years past in that we’re not in that free fall we had been.”

Yet although the budget forecast is calmer than in recent years, city officials still face many long-term budget problems, and the city might have to further reduce services in some departments. King asked the budget committee members and city councilors Friday for direction on how to structure the 2013-15 budget.

The City Council and budget committee members said they want city workers to prepare a budget that does as much as possible to prevent service reductions in the Police Department, Fire Department and street maintenance program.

That would require hiring more employees and purchasing more materials for street maintenance, but King said the city does not have enough money to do everything those departments say is necessary.

Property taxes are a major revenue source for the city general fund, which pays for police, fire and some street maintenance services. King said the city budget for the 2013-2015 biennium will be based on the projection that the taxable assessed value of real estate in Bend will increase 2.5 percent a year.

However, city officials expect increases in personnel costs to outpace growth in revenue. In particular, the cost of public employee pensions continues to grow. For example, the city will pay $1.6 million for police pensions in the current year and $1.95 million in the budget year that begins in July, said Finance Director Sonia Andrews. That is an increase of nearly 22 percent. King said the city must budget conservatively on the assumption that the pension system will not change, rather than assume that state lawmakers will make changes during the 2013 legislative session.

Additionally, Police Chief Jeff Sale and Fire Chief Larry Huhn told city officials that calls for service to their agencies continue to increase. Sale said police detectives have a total workload of 90 cases, 15 of which they do not currently have time to investigate. Huhn said that as firefighter and paramedic response times increase, stroke patients and others could have worse medical outcomes and fires could have time to grow more destructive. Huhn said that since the recession, many people believed that Bend’s population decreased and the demand for services would decline.

“The reality is our call volume isn’t going down,” Huhn said. “As you can see, it continues to go up.”

Public Works Director Paul Rheault and Bend Streets Manager Hardy Hanson said they need more materials and employees to prevent the condition of streets from further declining to a point where they will be much more expensive to fix.

“We do have some excess funds to do something with,” King said, “but … we do not have enough to meet the needs every department has.”

City officials will meet again to discuss the budget in March, and the budget committee will make its final recommendation to the City Council in May. The City Council will vote on the next budget before the end of the current fiscal year in June.