"Our revenue is down but our bills remain the same and that's the problem, getting enough revenue to pay the bills," Mayor Joan Faul said.
Mayor Joan Faul says the city is currently facing a $3.2 million deficit for the fiscal year.
And Atwater leaders are worried that gap could grow.
"As we move forward if we don't do anything it's going to be up to four million so we have to act quickly," Interim City Manager Frank Pietro said.
The city has now hired an independent auditor to review the books.
"We have to review every option that there is, so we have scenarios on just percentage cuts of the employees. We have scenarios on layoffs, we have scenarios on fiscal crisis declaration and we have scenarios on the benefits and detriments of bankruptcy," Faul said.
But the mayor maintains those are last resort options and they are now looking to beef up the general fund in other ways. On the table: merging local fire stations as a way to save money and shutting down city operated water fountains.
"The city council has not increased rate increases like water for 20 years and I believe the last time I talked with the finance director was 10 years for sewer," Pietro said.
On Monday night the city council pored over the numbers. At that meeting Mayor Faul announced she would also forgo her pay as a way to help her hometown's financial crisis.
Atwater resident Jim Price applauds her efforts but is worried it's too late.
"Frankly I just can't see how pink slips won't be handed out, and that's the saddest part about it," Price said.
Still, he's hopeful if city leaders work together, and work fast, the community may have already seen it's toughest days.
