"We're looking at a $9.5-million shortfall in this fiscal year," Mandoki said. The city's goal is to close the gap, he added.
The scheduled increase in medical benefits was approved by the City Council in 2008, Mandoki said.
Costa Mesa has paid the full premiums for its council members and executives for the past 10 years. The city is also negotiating with its five union groups to close the budget gap.
The city's executives are not represented by a union, but Mandoki said they usually follow suit with the rest of the employees.
"If they get pay reduction … we're not exempt from this at all," he said.
City Manager Allan Roeder said that while no one is ever happy to be taking salary or benefit reductions, he's always willing to do what he can to benefit the city's budget.
"My attitude, and it's not just this year, is if it becomes necessary for me to give up some of my salary and benefits for the benefit of the budget and to maintain services, I've always been open to doing that, as I am now," he said. "But I don't presuppose what I may support would be what others support."
Discussions with city executives are not limited to medical benefits. By the end, the executives might decide to take salary cuts because what is accounted for is the total compensation — salary and benefits, Mandoki said.
"We're looking to reduce compensation. It could be this; it could be something else," Mandoki said. "It could be salary or some combination of that."
Costa Mesa's compensation usually falls at average to the cities surrounding it, Mandoki said.
But the city hasn't looked at its compensation in relation to other cities for the past two years, since it started to address its budget shortfall, he said.
The city also implemented a 5% reduction of salaries through furloughs for most employees last year, so the city's compensation for its employees might be lower than average when compared with its surroundings, which would also depend on how other cities have addressed their budget shortfalls.
Costa Mesa has also been dipping into its reserve to make up for the shortfall, decreasing it by about $30 million in the last three years.
"From talking to all of the different groups, I think everybody is willing to contribute. I don't question that at all," Roeder said. "I think there's a question in terms of how much each of the employee groups are willing to contribute and in what fashion."