Mayor Tom Cosgrove reinforced the grim status of the city’s budget during a presentation Wednesday at Lincoln Area Chamber of Commerce breakfast meeting.

“In today’s situation, our operating expenses are greater than our revenue,” Cosgrove told the audience.

The city will “run out of money to maintain services,” according to Cosgrove, without “structural revenue or expense changes.”

Cosgrove also gave a “Government Finance 101,” which talked about what the different city funds were.

The general fund covers police, fire, recreation and library, which is funded through property and sales taxes.

Cosgrove said Lincoln receives 16 cents per dollar for property taxes, and a penny per dollar for sales tax.

He pointed out that the city currently used 82 percent of the general fund for public safety, 9 percent for library, five percent for library and four percent for other services not noted.

Restricted fees cover garbage, transit, water and wastewater. Cosgrove said the city is “not allowed to accrue any profit from, but is allowed to collect fees to make sustainable.”

For this fiscal year, the city reduced staff salaries, cut 56 jobs last year and used reserves to “fill the gap between revenue and spending,” according to Cosgrove.

If the city continues to balance the budget this way, the city would be $2 million in the red, according to Cosgrove.

“Don’t take this as we can’t meet the challenge because we can meet the challenge,” Cosgrove said. “One of the things we need to do is take a positive approach and meet the challenge.”