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The Rockville City Council received the first part of a two-part budget preview Monday night, and the news is what everyone expected: fiscal 2011 will be tough.

Revenues are likely to decrease in the upcoming year, forcing the city to reduce expenditures while trying to maintain services, City Manager Scott Ullery told the council.

The heads of five departments — Recreation and Parks, Police, Community Planning and Development Services, Information and Technology, and Human Resources — told the council about their priorities and what budgeting challenges may lie ahead as the process unfolds in the coming months.

Councilman Piotr Gajewski warned Burt Hall, director of Recreation and Parks, that while his department is the largest in the city and accounts for what many people picture when they think of Rockville, it will likely bear the brunt of cuts and reductions that the council will make.

Revenues to the general fund are expected to remain essentially flat, increasing just $200,000 in fiscal 2011, while expenses are expected to increase by $2.38 million.

Real property taxes are expected to bring in $1.5 million more to the city coffers next year, but the tax duplication payment the city receives from the county is predicted to be about $1.1 million lower.

The largest increase in expenses will be an additional $1 million the city will owe for debt service on bonds it will take to construct several capital projects, like the new city police headquarters at the corner of West Montgomery Avenue and North Washington Street.

The second part of the budget preview will be presented to the City Council on Monday.

The Public Works Department, City Clerk's Office, City Attorney's Office, Finance Department and the City Manager's Office will present their budget outlooks to the council.

In mid-January the council will set out its budget priorities and goals, and then on March 22 it will see the first draft of the fiscal 2011 budget.