A handful of reporters gathered on the seventh floor of City Hall this morning to hear how Mayor Greg Nickels plans to balance the budget now that forecasters are predicting that the city's revenue will drop another $29 million this year.

But the process this morning was a little backwards. The way it worked was that first Nickels held a press conference, then afterwards, reporters were told what the mayor plans to cut from the budget.

Mayor Greg Nickels is still holding tight to the hope that the federal government will grant Seattle the $50 million needed for the Mercer Street project, he said at a press tour of South Lake Union today.

Nickels said the Washington State Department of Transportation won't let go of the funds he's after because the money is supposed to support state highways exclusively.

Well the Seattle City Council is back to where they were two months ago regarding the Mercer Corridor project money, well, sort of.

If you remember, in late February the City Council voted to lift the spending restriction, called a proviso, on the Mercer project funding, even though the city didn't have enough cash to complete the South Lake Union transportation, or depending on who you talk to, beautification project.

The purpose of the proviso is to prevent the city from starting a project that it can't complete.

In a special meeting today, the Seattle City Council Transportation committee approved a measure to reverse a council vote last month to release the money to get started on the Mercer Corridor project.

So what really happened? Did Mayor Greg Nickels and Seattle Councilmember Jan Drago know that the Mercer Project was not on the list to receive federal funding before the City Council voted on Monday to remove the spending restriction, releasing the available funds to get the two year project going? Or were Nickels and Drago as dumbfounded as everyone else when the Mercer Project didn't make the cut?