The continuing struggles of the economy are hitting the City of Kirkland’s budget once again as it will have a $6-7 million budget gap during the next two years.

“At this point the decline has stopped, but we’re not seeing any real recovery,” said Tracey Dunlap, director of Finance and Administration.

The shortfall was originally forecasted in March to be about $5 million, but the continuing struggles of the economy and lower tax revenue has inflated the budget gap.

The change in the budget forecast reflects lost revenue from liquor sales if one or both of the proposed initiatives to privatize sales are passed in November. The change would result in a total loss of more than $730,000. An increase in contracted jail costs will cost the city about $600,000 and an increase of budgeted overtime for the Kirkland Fire Department about $800,000. All of these estimates concern the two-year time period.

City Manager Kurt Triplett instructed each city department to prepare budget reductions of 5 percent. The reductions would result in staff and service decreases.

Many of the reductions that have been taken thus far have been one-time actions such as furlough days for city employees and use of reserves.

The Kirkland City Council held a public hearing during its regular meeting Tuesday to get feedback from the public.

Three people spoke during the hearing, two of which voiced concerns for the potential loss of specific positions within the Fire Department. Kirkland resident Mike Nicrom spoke about how unique the economic times have been for everyone and the tough decisions that the city, county and state will have to make in coming years. Nicrom said he thought the tough times called for the suspension of state regulations for the building industry, to streamline city processes, outsource city work and a plan to reduce any non-essential staff, among other things.

The city will hold two more public hearings on budget issues on Nov. 1 and 16.