DANVILLE — A projected 9 percent decrease in projected equalized assessed valuation on properties for 2012 means city officials will have to cut $1.5 million in expenses to keep the property tax rate around $2 per $100 equalized assessed valuation.

“It will mean cuts in personnel and cuts in services, perhaps,” Mayor Scott Eisenhauer said.

Vermilion County Supervisor of Assessments Matt Long and Eisenhauer gave the bleak news to the city council’s Public Services Committee Wednesday night.

Long said the numbers are still being figured, with farmland seeing increases in value, but residential and commercial seeing decreases. He said big industrial buildings, such as in the Eastgate area, are sitting empty and “need to get filled sooner than later.”

Bunge also has dismantled a few of its buildings, which is affecting the assessed value, Long said.

Eisenhauer said the city saw a 6 percent equalized assessed valuation decrease last year, from $342 million in 2010 to $321 million in 2011. But due to abatements, the city’s $1.97 per $100 equalized assessed valuation property tax rate stayed about the same.

If the 9 percent decrease holds true, the city will go back to numbers it hasn’t seen since 2000-2001 when the equalized assessed valuation was $300 million or less.

If the city was to make no cuts or not increase its abatements, the city’s property tax rate would increase to $2.24 per $100 equalized assessed valuation.

“That is absolutely unacceptable,” Eisenhauer said.

“In order for us to focus back on a reasonable and acceptable tax levy rate, I think we need to be around that $2 mark,” he added.

Aldermen will have a tax levy study session at 6 p.m. Tuesday at city hall.

“We have a lot of work ahead of us,” Eisenhauer told the aldermen. He said everything is on the table, except to keep some reserve funding.

City Comptroller Gayle Lewis said the city is about $400,000 ahead in revenues so far this fiscal year.

“This is pretty substantial,” Ward 6 Alderman Steve Nichols said about the severe cuts needed.

Aldermen also are expected to have more certain pension numbers next week. The police and fire pensions make up about 53 percent of the city’s tax levy.

In other business, 10 years after the start of the Main Street widening project, the final phase will see construction next year.

The Public Services Committee recommended approving two Main Street Phase III resolutions. One is to appropriate $76,000 in motor fuel tax funds for reimbursement of construction costs relating to the project from National Avenue to Crestview Avenue.

The second is an agreement with the Illinois Department of Transportation for the project. The city is responsible for certain maintenance items within the state right-of-way at the conclusion of the project. The full city council will act on the items at its Nov. 6 meeting.

The final Main Street section runs from National Avenue, just west of the Veterans Affairs Illiana Health Care System entrance, to Lick Creek, near Kansas Avenue, east of Meade Park.

Widening and resurfacing will occur on 0.97 mile of roadway. There will be a bi-directional left turn lane, curb and gutter and traffic signal modernization.

Illinois Department of Transportation, District 5 acting program development engineer Craig Emberton said there will be a bid letting for Phase III of the Main Street widening project in November. Construction is expected to start as early as February and be completed in 2013, possibly with any minor work to be finished in 2014.

Construction is expected to cost $6.2 million for the widening, resurfacing, curb and gutter. The total project cost is about $8.4 million, with land acquisition, utilities and other costs.

Partial city costs, totaling $76,360, would be for traffic signals at the VA and Iowa Street, Danville Area Community College and Indiana Avenue and at Oregon Street; highway signal interconnect; sidewalks; and highway lighting.

The East Side Tap building will be demolished to straighten the jog that now exists from Iowa Street to the VA entrance. Vehicles will be able to exit the VA and travel straight across Main Street.

IDOT began widening Main Street in 2003.

Also on Wednesday, the committee recommended granting the property at 811 E. Fairchild St. for utility service as part of the Fairchild Street subway improvement. The city is granting the easement for $1 to Ameren.

Ameren overhead electric facilities need to be relocated as part of the subway replacement project.

The city purchased 811 E. Fairchild St., the former Schomburg and Schomburg building.