Dunn will present his report and recommendations to the City Council for reining in the budget during a special meeting Wednesday at City Hall.
Dunn's 48-page report includes short-term as well as long-term solutions for the City Council to consider.
"One of the things they need to tell me is do they want to continue providing the level of services we provide now," Dunn said. "If so, then that sends us one direction or are there other priorities that are more important for example police and fire."
The city's general fund reserves were projected to be $4.2 million by the end of last fiscal year, but they ended up at $932,000, according to Dunn's report.
The drop in reserves is attributed to the costs associated with cutting full-time positions 24 percent over the last 15 months, lower than projected revenues, high demand from citizens for services, lack of adequate systems for dealing with the city's declining financial position as well as legal costs, according to the report.
City leaders need to find more than $8 million build the reserves to meet the city's policy of saving 10 percent of expenditures as well as to eliminate funds with a deficit balance, including animal services, self-insurance and general capital improvement funds.
Short-term recommendations including approving $229,000 in budget reductions and approving a transfer of $250,000 in gas tax funds if necessary.
Long-term recommendations for increasing revenues include asking voters to approve an increase in the business license tax in 2014, raising fees for fire inspections, facilities and/or lights for sports leagues and non-profits.
Recommendations for reducing expenditures include seeking concessions from city employees, reorganizing some positions as well as evaluating methods of service delivery such as police, fire, animal services, information systems, engineering, inspection, fleet maintenance and library services.
The report includes an overview of each city department's budget and personnel costs, which Dunn said is his most costly expense.
The city's largest employee groups are in the Police and Fire Departments.
The average cost of a police officer, 46 are employed with the city, is $141,093.
The average cost of a firefighter, 12 are employed with the city, is $135,644.
However, no layoffs are being recommended through the rest of the fiscal year, he said.
"We're going to evaluate how we deliver services, which could potentially cause layoffs for the down the road, but I don't have anything identified," he said. "I know my employees the No. 1 thing they want to know is are there going to be layoffs."
Councilman Brendan Brandt said he anticipates being presented with options that are based on financial information as well as financial projections.
"Based on that information and input from our community and our city employees, I plan to make decisions to make sure that our city finances are stable and that we meet all of our financial obligations," he said.
Brandt said he has yet to see the results of the audit, the difference between the city's revenues and expenditures and the final amount in reserves.
"Just by the mere fact that our reserves have fallen below our policy level causes me great concern and demonstrates tome the need to change our way of doing business," he said.
The meeting will be at 4 p.m. at City Hall, 460 N. Euclid Ave.
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