The good news: West Linn is financially healthier than city officials estimated in the spring.

The bad news: It's not by much, and the budget is still tight.

Very, very tight.

'We are still not in the financial situation that a city such as West Linn should be in,' said City Manager Chris Jordan. 'Our reserves are not nearly what we should have.'

On Monday, Jordan and Andy Parks, a financial consultant with GEL Oregon Inc., gave the city council a quick, unaudited report on the city's finances, the first real numbers city officials have heard since they took office in 2004.

For most of the councilors' term, employees were fudging the city budget to cover the theft of more than $1.4 million. The loss of the money was discovered earlier this year, and the former finance director, Elma Sandoval Magkamit, pleaded guilty Sept. 29 to 57 counts of theft and aggravated theft. She is scheduled to be sentenced for her crimes Nov. 17.

At the council meeting Monday, Parks showed the city officials a newly calculated year-end budget for fiscal year 2005-2006, and a new beginning balance for the current fiscal year.

Overall, he said, the general fund balance started this fiscal year at about $10.2 million. That's about $800,000 more than the estimate made when the current budget was put together.

'This makes us more secure in our budget,' said West Linn Mayor Norm King. 'It doesn't look like we'll have to make cuts, and it doesn't appear we'll need (to borrow) for additional spending.'

But the budget, while meeting minimum spending requirements, is short when it comes to setting aside reserves and contingency funds for emergencies and capital projects.

Indeed, three significant accounts dependent on the city's general fund have no money to spare.

The parks fund, the library fund and the public safety fund combined are about $1.2 million short of what the city requires to be set aside.

'We don't have much play in our budget, but at least we know we are not overspending our accounts,' said Council President Scott Burgess.

'We're finally getting our hands around what money we have,' he added.

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