SANDPOINT — The city is slashing $223,455 from its operating budget in an effort to counteract shrinking revenues.

Mayor Gretchen Hellar said she is asking each of the city’s department heads to review their budgets for areas to trim fat after it was discovered that numerous city revenue sources will likely fall short of expectations.

Treasurer Shannon Syth estimates the city’s share of sales tax revenue might be down as much as 10 percent for the year, while other discretionary taxes such as funds derived from fees and licenses are also running behind projections. City officials also fear that the county’s 10-plus-percent unemployment rate could result in rising tax delinquencies.

Hellar said she’s choosing to cut the budget now — before knowing exactly how short the city’s revenue will be — because she does not want to be put in a situation where more severe cuts are needed later in the year.

“Shannon is projecting that the budget has to be reduced by one percent, but it could be that in three months it has to be reduced by another five percent, or it could be that she was overly pessimistic,” Hellar said. “I just don’t want to be caught in a situation like some cities have where they basically say, ‘OK cops, you can’t drive your cars around this week.’”

While reductions will come from all departments, Hellar said she will evaluate individual programs instead of making across-the-board cuts. Department heads will turn in their revised budgets next week and Hellar said she will announce the final cutbacks soon after.