Mayor Jim Ford said he anticipates a shortfall of about $108,000 in the current fiscal year. The number was reduced from City Manager Paul Eckrich’s original estimate of $160,000, thanks to an increase in revenue from property taxes and the board of public works.

Ford said the deficit amount is likely to change as council further reviews the budget. Though $108,000 is a vast improvement over last year’s $750,000 shortfall, Eckrich said he’s already certain Lewes’ expenses will rise next year.

He said tipping fees, paid to the Delaware Solid Waste Authority for trash disposal, will increase by 40 to 70 percent. The city budgets $150,000 to pay for waste disposal; under the proposed increases, Lewes might have to pay $60,000 to $105,000 more.

Lewes plans to assume the expense of maintaining Canalfront Park on Pilottown Road, which Eckrich said could cost around $30,000 a year. The city will also begin paying off bonds secured in 2005 to fund road projects and last year’s construction of a new town hall.

Lewes increased a number of fees to cover a fiscal year 2010 budget gap, including a 2 percent increase in the gross receipts tax on rental properties. Still, Eckrich said, the city will do everything it can to avoid burdening its residents.

“We’re very early in the process,” he said. “I’m not saying there won’t be an increase in fees, but I do know mayor and council will look very hard at it.”

Mayor Jim Ford said Lewes has successfully kept its administrative expenses in check, landing within 1 percent of the budgeted amount. He blamed the revenue shortfall on a weak revenue stream. Despite conservative budgeting, he said, the city’s transfer tax failed to produce expected revenues.

Ford said he expects the state to help shoulder expenses accrued from February’s twin blizzards, which dumped more than a foot of snow on the city and pushed maintenance worker payrolls into overtime.

The financial prognosis is far from sunny, but Ford said he’s confident the city will avoid another round of fee increases. Council members decided to reduce the deficit amount after the city received $20,000 in property taxes from recently annexed Savannah Place and $40,000 from the board of public works, which pays Lewes in lieu of a franchise fee.

“The council’s doing the best it can to make adjustments accordingly,” he said. “Personally, from a gut feeling, I think we’ll be able to address this deficit without a property tax increase.”

Andrew Ratner, vice president of Prudential Gallo Realtors, said last year’s increase in the gross receipts tax on rental homes made renting in Lewes a more costly affair. Another tax increase might ward away vacationers, he said, depriving Lewes of revenue instead of generating it.

“Prices would go up. Tenants would have to pay more,” Ratner said. “They can barely afford the rentals that are out there as it is.”

Ford said the council will meet every Friday in February to fine-tune its budgetary estimates and chart a path forward. “This is just a projection,” he said. “We still have two full months of the fiscal year remaining.”