WALNUT CREEK -- Voters have not approved any new tax, nor have city leaders called for an election for one. But it's likely the two-year city budget will include new money from higher taxes.

At a City Council meeting Tuesday, a council majority gave a tentative go-ahead for city staff to develop a two-year budget, which the council must adopt by July 1, that includes new tax revenue. Whether such a measure will be in the form of bonds, parcel or sales taxes, none of that has been debated or decided publicly yet. But city leaders have been beating the dire-financial-straits drums for years now.

City Manager Ken Nordhoff estimates the city will have a $2 to $5 million yearly budget gap starting with the next fiscal year. That means the city will not be able to provide the services it always has, he said.

"Not sure the community knows we really have a problem," Nordhoff said Tuesday.

Specifically, Walnut Creek has millions in unfunded maintenance of roads and buildings, a need to replace some aging facilities, employee compensation issues and no money to pay for things such as the additional 21 open-hours at the county libraries in Walnut Creek.

But even if the council decided to put a tax measure on the November 2014 ballot, even if it passes the city would likely not see a dime of new revenue until the summer of 2015. That means that, like it or not, the City Council will have to make some tough decisions to close that $2 to $5 million budget gap in the first year of the two-year budget.

"We are faced with a serious crisis," said Mayor Cindy Silva. "For the first time we are going to be seriously discussing ... some very serious service level cuts."

Under threat are loss of hours at pools and libraries, she said.

For years Walnut Creek has been trying to making ends meet and performing "triage," said Councilman Bob Simmons. It's time to explore new revenue, he said. "This is not an approval in any way of any specific alternative (tax) measure, all we can do as a council is propose," he said. "We have to go to the voters. I think we are at the stage now that we have to give serious thought to making sure we give the community a chance to vote on the kind of future they want for their city."

With lots of debate and escalating tension, it's clear some council members are unsure what a tax measure would resolve.

Councilman Justin Wedel said higher taxes is a solution, but that he doesn't know what the problem is, and questioned whether residents would understand.

"We are still not answering any questions ... other than threatening the community that (things) will go away," he said. "This council has not made any of the difficult decisions."

Wedel said there are other cost-saving measures the city can try.

Mayor Pro Tem Kristina Lawson said she too was confused about what exactly new tax revenue would pay for. If the city wants every service to continue, then a half-cent sales tax -- proposed by the city's Blue Ribbon Task Force in 2011 -- wouldn't come close to covering all of the city's needs. If the city needs more money until the economy recovers completely, then the council and public need to know that, she said.

She said the focus for budget planning should be on economic growth and improving efficiency.

"Our community has not traditionally had great success with tax measures and I certainly don't want to divide this community any more by proposing something solely to solve a problem we haven't yet defined," she said.

Advocates for programs such as the pools, the Bedford Gallery and the library each said they would support a tax because they don't want to see cuts to their programs.

Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.