ESCONDIDO -- Facing a budget crisis that will require employee layoffs and drastic program cuts, Escondido City Council members agreed Wednesday to cancel half of the 10 percent pay increase they received Dec. 3.

The decision will only cover about $2,250 of the city's $6 million projected deficit, but council members said the move was an important symbolic gesture.

"We have an opportunity to demonstrate to city employees that we're not taking a gain at the expense of others," said Councilman Dick Daniels. "The least I can do is forgo a raise."

Instead of legally rescinding the pay hikes, the council chose to unanimously adopt a nonbinding resolution promising to refuse the extra money until at least January 2010.

Council members said they chose a less formal approach because it was simpler, quicker and would allow the raises to be revived more easily if the economy improves.

But Councilwoman Olga Diaz, who was elected in November, said council members may have to take a more legal approach to the issue if there is public outcry about them simply promising to refuse the extra money.

Diaz and Councilwoman Marie Waldron have been the most vocal proponents of council pay cuts, but Councilman Sam Abed placed the item on the agenda after having what he called a "change of heart."

Daniels said he voluntarily refused the entire 10 percent pay increase last month without telling anyone.

Mayor Lori Holt Pfeiler was the most reluctant member of the council, and she complained about taking a cut before finally agreeing Wednesday.

She said higher salaries broaden who can run for City Council beyond just retired people and the wealthy, and she stressed the amount of time and effort that goes into the jobs.

"It is critical for us to acknowledge that when people give up time to serve, it costs them," said Pfeiler. "We need to say this service is worth something to the community."

But Pfeiler also agreed that plans to lay off 31 city employees and freeze virtually all city pay increases made the council pay hikes seem inappropriate.

The raises were approved in 2007, well before sharply declining sales tax and property tax revenue created an approximately $6 million deficit for the city. But they couldn't legally take effect until after the next council election, which occurred in November.

The raises bumped the annual pay of the four council members from $26,294 to $27,663, but Wednesday's decision will lower that to $26,969. The annual pay of the mayor, which is considered more of a full-time job, increased from $51,254 to $55,119. But Pfeiler's salary will now be $53,187.

Included within each of those salaries is $9,000 per year for auto expenses.

Contact staff writer David Garrick at (760) 740-5468 or dgarrick@nctimes.com.