Colorado Springs' Mayor and City Council sit for a scheduled meeting on July 18, 2012.

The administration of the City of Colorado Springs is working to balance the budget for the coming year, but say they are facing some major challenges. The budget proposal is due to be presented to the City Council on October 1.

Mayor Steve Bach says he’s using priority-based budgeting, meaning he intends to spend money where residents say they need it most.

For the first time, the mayor’s office is also starting each department with a balance of $0 and asking them to justify their funding. They say that strategy will be a lengthy process.

"That is before we talk about spending any money at all on stormwater drains, roads, bridges and mission critical capital replacements for police and fire going forward," Mayor Bach said. "We have very daunting financial challenges, but we can work through those if we're diligent and if we have the courage to take steps. It does mean that we're not going to be able to fund everything that everybody would like."

At a town hall meeting earlier this week, Mayor Bach said that the city will not be able to pay its bills in 5 to 7 years if changes aren’t made now.