The federal government may be able to spend more money than it has coming in, but municipalities like Sherwood aren’t allowed to do that.

Its city coffers have to finish in the black annually, and its elected officials are trying to figure out a way to deal with increasing expenses and with revenues that aren’t keeping pace.

On July 3, the city of Sherwood held a workshop of elected officials as well as some department heads and discussed several important financial issues.

Mayor Virginia Hillman called for the workshop as a way to get all city leaders involved in coming up with solutions to upcoming financial problems.

For years now, the city government has been looking at ways to cut expenses while it has seen its expenses rise. In recent years the city moved forward to buy and reopen The Greens at North Hills at a cost of $5 million and paying the city’s chamber of commerce $119,000 to hire the city’s first economic development director.

The city in recent years also moved forward with converting to automated garbage pickup, which is projected to save the city money in the long run by employing fewer people and saving money with reduced worker’s compensation claims. In the short run, such changes cost the city a considerable sum in start-up expenses, such as the buying of garbage trucks.

Those decisions were made as city leaders — especially during the budget-drafting process in 2011 for the 2012 budget — looked over the municipal budget line item by line item to see where less money could be allocated so the city could adopt a mandated balanced budget for this year.

During recent years, some city departments have seen their employment levels decrease as part of cutting costs — with two such departments being engineering and public works.

Although city leaders were able to pass a balanced budget for 2012, that accomplishment is being seen as more difficult for 2013 and beyond.

“There are some decisions that we are going to have to make,” Hillman said during the work session.

Hillman’s comments came as city leaders were told they are going to have to figure out a way to come up with about $300,000 annually for the next five years (2013-17) for an upgraded/new emergency communications system for the police and fire departments.

City officials said paying the sum monthly would be about $25,000 monthly, which is the equivalent for some worker positions in the city government.

Besides coming up with cash for the emergency communications system, city officials discussed the need to repair and maintain city streets.

City officials said the cost to overlay streets and put in needed sidewalks in various parts of town would be between $5-$7 million with an additional $2-$3 million needed to maintain them.

Hillman said another impending cost to Sherwood will be when Pulaski County asks all municipalities within the county to pay more in jail incarceration fees. The county recently announced it is expanding the number of beds at the county jail and will be asking all of the county’s city governments to pay more.

She said Little Rock and North Little Rock will be asked to pay the most, but the other cities of Maumelle, Sherwood and Jacksonville will be requested to increase their support.

Another added expense in recent years has been the annexation of the Gravel Ridge area, but the city is getting more state and federal turnback dollars because of Sherwood’s larger population, Hillman said. She said she believes the city is about breaking even in how much money it is spending to provide services to the Gravel Ridge area in comparison to the increased level of revenue coming from that area.