What’s left of the city’s water conversation team will be disbanded next month, although city officials say they intend to continue urging residents to watch their water usage.

As part of a 2009-10 budget update report to be presented at the April 19 City Council meeting, City Manager Penny Riley will propose to reassign two of the team’s remaining three members into the utilities systems operations division of the public works department while the third person will return to the parks, trails and landscape maintenance division.

Kristen Crane, the city’s water conservation manager, will continue those duties and take on additional responsibilities involving the city’s reclaimed water program and its relationship with the San Diego Metro sewer system. She will be assisted by another transferred water team member, Linda Shields, a senior management analyst.

Riley said Thursday that the water conservation office at 13202 Poway Road will close and the city intends to eventually sell the 2,000-square-foot building, which once housed the community services department.

The team was formed with seven members in the spring of 2009 in anticipation of the city’s water supplies being reduced due to the ongoing regional drought. When formed, the team had seven members with its $700,000 projected annual expenses being financed by the city’s water ratepayers. Four team members were previously returned to their original city jobs to help with increased workloads caused by budget cuts, leaving the three current members, plus a temporary-hired assistant who will not be retained.

The city remains in a Stage 2 water alert status and is under mandates to reduce its annual water consumption by 8 percent. The city is well ahead of that goal, with most-recent figures showing a savings of 27 percent. Mandatory allocations and watering restrictions are widely expected to remain in effect for at least another year, although the final decision is not due for a couple of months.

Riley said mandatory watering restrictions, coupled with increased public education and higher water rates, have significantly improved the city’s conservation picture, but attention will continue to be paid to the issue.

“We don’t want to send out the wrong message,” she said.

In her quarterly budget report, Riley said the cost of the two employees going to the utility system operation divisions, about $149,000, will be born by city sewer ratepayers while costs associated with the third employee, about $40,500 will be paid out of the general fund.

Termination of the team is the only recommendation being made to the current budget, which Riley said is tracking well with projected revenues and expenses through June 30.

“After nine months of activity in FY (Fiscal Year) 2009-10, our General Fund revenues are holding, and remain sufficient to continue operations with no further reductions through the fiscal year,” the report concludes.

The city is slightly ahead of mid-year projections for sales tax revenues, which Riley attributes to last fall’s “Cash for Clunkers,” auto sales program and the “relative stability of Poway’s general retail sector.”

In June, city officials will learn about sale tax revenues for January-March, which Riley said will reflect the impact of the Toyota recall and post-”Cash for Clunker” sales.

Roughly one-third of Poway’s sales taxes are generated by its car dealers.

On another budget front, Riley said the city should know later this month whether it needs to send the state a check for $16.5 million in redevelopment funds.

Under provisions of an approved state bill, the state is attempting to take $2.05 billion from California redevelopment agencies to help balance the massive state budget deficit. The move was challenged in court in February by the California Redevelopment Agency, which was successful in a similar situation last year.

Riley said the city has the money ready, but if the payment is made as requested by May 10, it will “effectively cripple the city’s redevelopment efforts,” including plans to revamp Community Park.