They have watched their city's budget deficit slowly shrink for four years, but on Tuesday the Rohnert Park City Council bent under the accumulating — and rising — weight of retirement and medical benefits and unanimously agreed to declare a fiscal emergency.

The move comes three years after the city last declared a fiscal emergency, in 2010. Then, it faced a $5 million deficit and that year officials, supported by employee unions, also convinced residents to approve a five-year, half-cent sales tax ballot measure.

Tuesday's decision was taken in conjunction with adoption of a $24.5 million budget for next fiscal year, with a $1.4 million general fund deficit. Remarks by several council members foretold tough contract negotiations as the city seeks to lower its personnel-related costs in upcoming talks.

"This could push us over the brink," Vice Mayor Joe Callinan said after hearing that the city's share of pension premiums for public safety officers could go from 47.6 cents of every dollar this year to 68 cents in 2016, in the worst-case scenario.

For all other city employees, the city's share of the premium is projected to rise from 26.5cents to 40 cents in 2016, finance director Cathy Orme said.

Told by City Manager Gabe Gonzalez that meeting the city's unfunded liabilities — including long-delayed infrastructure upgrades — would cost an additional $22.9 million a year, several council members uttered a word they last invoked at the recession's height.

"Looking at these numbers, I hope we can come up with something that can help us avoid bankruptcy," Councilman Amy Ahanotu said.

Medical and workers compensation bills also are projected to continue to rise, Orme said.

Gonzalez, who asked the council to declare the fiscal emergency midway through the budget presentation, said: "It gives us further ability to stay committed to address our fiscal situation on a long-term basis."

Some legal analyses have suggested that a state of fiscal emergency may, in some cases, allow cities to temporarily alter employee contracts, including benefit packages. Such an action, however, was not mentioned Tuesday.

Gonzalez and Orme several times made the point that Measure E, the half-cent sales tax that brings in more than $2.4 million a year, will expire in 2015.

Gonzalez last year floated the idea of asking voters to extend the tax measure, and a state of fiscal emergency is required to hold the special election that might be required to take that step. But Tuesday, Gonzalez said during a break that such a move is not now being considered.

Council members indicated the problem needs to be tackled at the level of labor talks, though they were legally prohibited from discussing them in detail Tuesday.

"Our employees really like working for the city; that's why they stay here," said Councilwoman Gina Belforte, acknowledging pay cuts had been taken, that dozens of workers had lost jobs, and some had lost homes as a result.

"But I think we need to look at a different way of doing business," she said, calling for the creation of group of "stakeholders," including retired employees, to help address the issue.

Callinan was more blunt. "When we go into negotiations, negotiate," he said. "Let's not just call a fiscal emergency, let's do something about it."

Councilman Jake Mackenzie supported the decision, but also held out hope that the city's revenue-sharing agreement with the Federated Indians of Graton Rancheria, owners of the casino being built on the city's outskirts, could provide some future relief.

The agreement is to steer $251 million in casino profits to the city over 20 years, largely to offset the casino's impacts on traffic, infrastructure and public safety.

But Mackenzie said. "I aver that there are monies we will be able to take into consideration in the outer years."

You can reach Staff Writer Jeremy Hay at 521-5212 or jeremy.hay@pressdemocrat.com.