The Goleta City Council resumed budget discussions at a special workshop Tuesday, making some tough choices in an effort to close a nearly $1 million budget gap projected for the upcoming fiscal year.

“This is a painful decision; I don’t like it,” Councilman Roger Aceves said of the council’s decision to reduce its law enforcement contract with the Santa Barbara County Sheriff’s Department by two patrol positions.

The lost positions would be backfilled by two existing motor police, for an estimated savings of $402,000 for the fiscal year.

Aceves’ sentiment was echoed by other council members as they grappled with a sizable jump in the amount of the city’s contract with the Sheriff’s Department.

Because of rising costs, particularly in the realm of retirement benefits, the Sheriff’s Department is dealing with its own deficit — totaling $8 million — a gap that is being filled with, among other things, a proposal to close the Santa Maria jail and eliminate 62 positions, including 24 that are currently filled. Costs are being passed on to cities with department contracts.

For Goleta, to keep roughly the same level of service, its contract will rise 10.7 percent for the upcoming fiscal year, translating to about $628,000, and then another $730,000 for fiscal year 2012-13, the second year of Goleta’s two-year budget cycle.

But the full cost of the increase proved to be unpalatable for the cash-strapped city, even with a projected $2.7 million to 2.9 million “bump” triggered by changes expected according to the terms of the city’s revenue neutrality agreement with the county.

“Our revenues are just not capable of keeping up with those kinds of increases,” Councilman Michael Bennett said.

While about $14 million in revenues expected to come to the city, other factors, including rising water costs and potential employee salary increases, are likely to take their toll on the budget as well, leading to suggestions that employees should start paying a share of their retirement — a cost usually covered by the city. Also under consideration is the use of money set aside for the city’s Measure A Maintenance of Effort spending requirement.

Mayor Margaret Connell suggested cutting the requested increase by half.

After some conference between the Sheriff’s Department and city staff, the City Council chose the option they determined would result in cost savings while making it possible to retain more or less the same level of service.

— Noozhawk contributing writer Sonia Fernandez can be reached at sfernandez@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk or @NoozhawkNews.