For Bend’s next two years, there may be no more important document than the 630 pages of the city’s proposed budget. And it comes with a big hole.

There are about $591 million in operating revenues for the two years, though the total budget is bigger. The Bend City Council doesn’t have unfettered freedom to spend dollars as it chooses. Councilors only have maximum discretion over about $162 million. The rest is restricted in some way, such as money committed to the city’s water system or transportation spending outlined in bonds.

The hole comes because annual operating revenues are projected to increase by about $63 million. Expenses are projected to rise by $181 million. That makes for a gap of $118 million.

“Reserves and one-time revenues, such as grants and asset sales, will close most of this gap,” City Manager Eric King notes in his budget message. “However, relying on these funds is not sustainable long-term. The city has taken steps to limit expenditure increases while drawing down reserves and contingency levels where feasible and in compliance with city financial policies.”

Some fees are likely going up. What you pay for water, sewer and stormwater are proposed to increase, making for an average increase in utility bills by 4%.

The city is adding more staff, despite its financial challenges. The city has just over 831 full-time equivalents. The proposal is to increase the number of personnel by 14.5. The proposal is for four new positions in the police department, one and a half in the fire department, one in water infrastructure, five in streets and operations, one in the public works warehouse, one in the city manager’s office and one in fleet management.

Other personnel costs are expected to rise. The city expects health insurance premiums may go up 20% in the first year of the new budget and 20% in the second year. That will cost the city some $10 million. The rates the city pays for the state retirement system, called the Public Employee Retirement System, will go up by 33%. That’s another $13.2 million over two years.

Bend City Councilors are going to have to address the big hole in the budget. The city manager’s budget note and the proposed budget don’t lay out a menu of options. What will the councilors do? Cut spending? Raise revenue? A mix? They should present some options to the people of Bend.