A hard look at Orinda's two-year budget has leaders once again homing in on police services and talking about how changes to that department -- which consumes 40 percent of the city's budget -- might save the city some cash.

Council members met Thursday to consider proposed adjustments to the 2013 operating budget and capital improvement plan, to help close an anticipated $236,045 shortfall next year.

Officials discussed the gap earlier this month, and heard suggestions from residents that salary savings from the elimination of a police officer could potentially fill the financial hole. Staffers explained that the deficit is the result of factors including a 1.1 percent dip in property tax revenue, a decline in proceeds from building inspection and planning fees, and a $45,549 loss of state vehicle license fees.

At Thursday's workshop, city leaders stopped short of making any executive decisions on how to trim police costs. But they conceded that, although they value the service of law enforcement officers contracted through the Contra Costa County Sheriff's Office, they must look at ways to save money.

Chief Jeff Jennings responded that, in his opinion, the current service model in Orinda "is the best model." The department includes the chief, sergeants and 14 sworn officers, among others.

According to city staff, the largest cost increase in the 2013 budget is for police services. That's due to a 7 percent ($160,000) increase in a contract with the county. While proposed overall 2013 salaries have been lowered by $46,390, county benefits -- including medical and retirement -- have increased by $160,839, to $1,614,023. The latter amount reflects a 24.2 percent hike in projected medical and retirement costs for 2012.

Councilwoman Sue Severson said she was struck by the costs, which now account for about 40 percent of Orinda's overall budget expenses. She questioned the increase while the city has been reducing staff in every department. "I don't see that this trend can continue," Severson said.

While they decided to avoid delving into how unfunded liabilities may factor into the increased costs, they directed Jennings and City Manager Janet Keeter to keep exploring ways to reduce public safety expenses.

City leaders also discussed potential income from the opening of the Wilder play fields, and updates on three capital projects, including improving access to the Community Center at 28 Orinda Way and bringing it and other facilities up to Americans with Disabilities Act standards. That cost is projected at $75,000.

They also considered earmarking $15,000 from a $130,000 request for maintenance and enhancement of the Orinda Sports Field, and said they would only approve the full amount once a five-year lease agreement is signed with the East Bay Municipal Utility District, which owns the land.

In other news, the council approved raising fees for some city services at a meeting Tuesday. Charges for administrative, parks and recreation and public safety services will all increase while planning fees will jump by 3 percent. Development impact fees, including park dedication, transportation and drainage fees, will also see an increase. The city hopes the move will provide a $25,000 infusion.

They also approved awarding a $1.4 million construction contract to Novato-based Bay Pacific Pipelines to repair a section of damaged storm drain near Glorietta Boulevard. Leaders directed city staff to explore ways of reducing the more than $1.9 million cost of the fix.

Officials will meet again discuss the budget before it heads to the council for formal approval in June.