POULSBO — Susan Hoke has received some unsettling phone calls lately. A month ago she learned she has cancer. Last week she learned her position as office clerk with the city of Poulsbo could be eliminated.

Both, she said, were totally unexpected.

“There were grumblings two months ago about furlough days one day per month, and then there was nothing. It just kind of went away,” Hoke said. “And then all of a sudden we were blindsided by this.”

Hoke, who was on sick leave while undergoing treatment, said she was encouraged to consider the city’s Voluntary Separation Program, an agreement that provides severance pay to those who leave their positions voluntarily. The city plans to save money by leaving those positions unfilled.

She applied quickly because the number of positions the program will accept are limited, she said.

If Hoke is approved, she’ll receive two months severance pay and $12,695 to be used for one year of COBRA health care.

Poulsbo Mayor Becky Erickson said “more than several” employees have applied for the program, which is working as city leaders hoped. She was unwilling to say exactly how many have applied, and said other layoffs could still occur.

Employees have until Sept. 1 to apply.

In an email to city employees late last week, Human Resources Director Deanna Kingery said layoffs are necessary in light of the city’s budget deficit, but that enough voluntary layoffs could mean involuntary layoffs are “kept to a minimum.”

The city faces a potential deficit of $700,000 to $1.2 million in 2011. Erickson said the City Council will make the final decision on whether positions other than those vacated through the separation program will be eliminated.

Various general fund transfers, such as those to Parks and Recreation and street maintenance, could be decreased to help close the gap. The city also did away with its K-9 police program, which was preparing to retire one canine and train another.

“The only thing we really have left is staffing changes,” Erickson said.

The council will review the number of program applications during its meeting Aug. 18, and discuss how the city will continue cutting costs.

Erickson acknowledged the difficulty of the process at a meeting Wednesday night.

“This is about positions, not faces, as hard as that might be,” she said.

Erickson said she has worked primarily with department heads, who have alerted staff to the likelihood of layoffs as they see fit.

Hoke, 49, envisioned retiring from city hall, where she enjoyed processing passports and greeting customers when they paid their utility bills. She worked for the school district before joining the city in 2008.

Hoke took the job because it offered more stable hours, she said. Now she’s unsure where she’ll work in 2011, or how she’ll find a job while still undergoing chemotherapy.

Before applying, Hoke emailed Erickson and the City Council asking for more information on how her position could change in the future, but hadn’t heard back several days later, she said.

When Hoke ran out of sick leave, her husband, a 17-year Poulsbo Police officer, and many of her coworkers donated vacation time so she could continue to recuperate at home.

“I like that when you call city hall, we answer the phone. I like that you don’t get an automated voice. It’s that small-town feel,” Hoke said. “I’m afraid that’s going to change with all these cuts.”