Adding all expenses deemed necessary by city staff, and the 2002 deficit tops out at $3.2 million and by 2005 $3.3 million.
If the budgets were to include a minimal $1.5 million reserve, by 2005 the deficit reaches a projected $10.5 million.
To preclude such deficits, the City Council and city staff discussed the potential for increasing revenues. Two ideas that would result in higher sewer and water fees to users include charging for water and sewer rights of way, which could add $350,000 to the city's budget, and charging the water and sewer department for fire hydrant flushing, which could add $100,000.
Three revenue enhancing ideas that require a two-thirds majority vote in the city include an increase in property taxes, which could raise $8-10 million; a utility tax measure to fund police and fire protection, which could raise $2 million and an increase of 1 percent in the local sales tax, which could add $3 million but requires a countywide election.
Other ideas include an increase in hotel taxes from 10 to 11 percent, which could add $60,000-$70,000 to the current $850,000 collected annually, and the creation of a Mello-Roos financing district in all new developments such as the three housing projects planned for the west side of the city and before the City Council for consideration.
Mayor Cheryl Walker said before the city goes to the voters to seek higher taxes, the city must ensure it is spending every dollar as frugally as possible.
"Are we as efficient as we can be?" she said.
Councilman Jack Dunnam said it's unlikely voters would approve any tax increases.
"I don't want to sound defeatist, but I don't think you're going to get a nickel out of the public," he said. "You're going to have to do it in this room."
Meanwhile, a $900,000 increase in workers' compensation premiums has the council and staff looking at how such expenses can be decreased.
Councilman Larry Grogan suggested the police and fire departments hire more employees rather than depend on overtime, which can lead to injuries.
Walker asked staff to provide information on how many employees are on workers' compensation, for which department they work, how long the cases have been open and what the costs are. She specifically said to exclude employee names.
City staff was directed to look into seeking workers' compensation coverage in the private sector instead of the joint powers authority in which the city participates.
Councilman Jack Terrazas asked city staff to research benefits assessment districts and the possibility of seeking voter approval for the establishment of one.
Councilman David Dhillon said his priorities are police, fire and city maintenance. He said he supports adding city personnel to reduce overtime.
In the end, council and staff decided to have a third workshop sometime in July.
Salem said the city would continue to spend at the current rate until a budget can be formally adopted.
The new fiscal year begins July 1.
Staff Writer Rudy Yniguez can be reached at 337-3440.