"On July 1, 2011, we have a budget gap of $12.5 million, which depending on the outcome of Proposition H, could grow to $18 million," said Chula Vista City Manager Jim Sandoval during Tuesday's city council meeting.

Proposition H, the Utility Users Tax, would revamp the levy on phone companies and extend the assessment. According to Sandoval, residents would pay anywhere from 88 cents to two bucks a month if voters extend the tax. The estimated $6 million in tax receipts would be needed revenue during what city officials predict to be a slow economic recovery.

Since 2008, the South Bay city has witnessed an 18 percent decline in property tax receipts, a 17 percent decrease in sales-tax revenues, a 28 percent drop in the hotel-tax revenues, and a 39 percent decrease in developer-impact fees. Chula Vista ranks fourth in the county — behind Imperial Beach, Oceanside, and Coronado — in sales-tax revenues per capita.

Assuming the Telecommunications Users Tax passes, according to charts shown during Tuesday's presentation, the budget gap during the next five years will not go away. By the year 2015, officials predict the City's deficit to be $9.7 million — if voters refuse the tax, the deficit could grow to $18 million.

To bridge the gap, the city manager laid out a list of public service cuts, including axing 71.5 jobs from the city's payroll. Among the cuts is a 14 percent reduction to the library department, in addition to the 56 percent of cuts in that department since 2007, and a 21 percent drop in funding for the recreation department, adding to the 44 percent cuts since fiscal year 2007/2008.

After staff's presentation, the pubic was given a chance to comment. More than 40 people waited in line to speak to the council.

"I suggest that you don't spend what you don't have. The only way to work our way out of debt is by not going into debt," said William Howard, a 45-year resident of Chula Vista.

Nearly two hours of public comment later, councilmembers spoke on the upcoming reductions to the budget.

"There are still some glaring examples of where the city could have done better," said councilmember John McCann, referring to the failed attempt at bringing a Home Depot to the site of the now defunct Kmart on Third Avenue.

"The process became so arduous...and now we lost the Home Depot. We do not have those jobs...we are left with a blighted area," said McCann.

Councilmember Rudy Ramirez also reflected on the past few years, since Chula Vista's money woes began. "This has become an annual event for us. Here we are again, faced with the same issues of dwindling resources and the demand for services.... I continue to be pessimistic about our economic future."