Spurred by a projected $3 million budget shortfall caused by higher than expected pension costs and police department salaries, Desert Hot Springs on Tuesday met to discuss spending cuts to stave off bankruptcy.

The California resort town, which filed for bankruptcy once before in 2001, said its general fund would be empty by the end of March and savings must be implemented by the end of December. City Council held a special meeting to consider how to keep the municipality of 26,000 residents from joining two other California cities, Stockton and San Bernardino, and Detroit in seeking protection from creditors.

More than 150 residents attended the meeting, during which considered cuts included: a 10 percent reduction in vendor contracts, which would save $650,000; reducing police salaries; and employee furloughs.

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