City officials started their look into the spending picture for their annual budgeting process, and some revenues are nearly back where they were before the recession, City Manager Ken Striplin said Tuesday.

Figures given during a planning session at City Hall reported that sales tax revenues, which is the city’s main source of income, are only expected to be about 7.3 percent off of pre-recession levels.

However, city officials are also monitoring potential changes to Internet sales tax collection, which could impact that figure.

The city sticks to a conservative, time-tested funding formula that calculates decisions based on the five-year impact, Striplin said

“One of the hallmarks, as long as we’ve been a city, is making the budget from a very fiscally conservative perspective,” said Mayor Bob Kellar. “And it has paid huge dividends.”

City staffers also identified five major funding challenges for the city in the next year: improvement of Canyon Country and Newhall; enhanced services within the new annexation areas; ongoing operating costs for Central Park’s expansion, the Canyon Country community center and library services; Whittaker-Bermite’s cleanup; and public safety.

“We’ve been down this road before, where the county feels like contract cities are not paying their fair share,” said Striplin, who was named city manager in December. “That means they might try to find a way to make us pay more.”

Striplin was promoted after holding the title of assistant city manager, and has worked for the city for more than 17 years.

Kellar said the cost for the city’s public safety could go up this year as much as 5 percent, as a result. Public safety is one of the city’s largest costs each year, which, as a percentage of the budget, is very close to what it spends on parks and recreation

“That figure has yet to be determined, so I don’t want to cause any panic — but if it does go up by that, we will be able to meet that obligation,” said Kellar, who also spent more than two decades in law enforcement as an LAPD officer.

“But I want to emphasize to our community the value of the services we get in Santa Clarita as a contract city with the L.A. County Sheriff’s (Department), this is the best deal in town,” he said.

The most recent development in public safety has been a county audit that saw an increase in patrol services to unincorporated areas, after an audit showed a difference in response times between unincorporated areas and contract city service areas.

City Councilwoman Marsha McLean asked for clarification on the city actual acreage of contamination for Whittaker Bermite. The former munitions site has been undergoing a cleanup effort for decades, and she requested clarification on exactly how much more land has to be cleaned.

Canyon Country’s community center opened this year, and the city has also recently annexed land in the area, which also saw the addition of two deputies to the local Sheriff’s Station to increase patrols.

The city budgets with a few basic tenets each year, Striplin said.

“Always live below your means; run a lean organization; use conservative 5-year projections,” he said, during the budget presentation.