Salt Lake City budget officials are huddling with Mayor Palmer DePaulis to draw up an alternative budget that will take into account $12.5 million in cuts the city expects if three tax initiatives are passed.

"In case this tax initiative does pass, we'll be ready for it," city Finance Director Lance Bateman told DePaulis in a meeting on the initiatives. If passed, the initiatives would limit property taxes, roll back 1987 tax increases and provide tax credits to parents with children in private schools.Although officials spoke in Draconian terms of the impact of the initiatives, DePaulis said preparing the alternative budget could present a challenge and an opportunity that would really be helpful for next year's budget.

Earlier this week, DePaulis convened the meeting of finance, personnel and capital planning officials to prepare for the impact of the initiatives, which officials say would slash 13 percent to 15 percent (about $12.5 million) from the city's general fund budget.

"That number is so large that it's obviously not the kind of number we could spread across the board,' DePaulis said, adding that some city departments would be "obliterated."

The result is that DePaulis and his budget team are working to establish a list of priorities to protect essential city services. Eventually, the mayor wants to use the principles to develop an actual budget that would incorporate the cuts if the tax initiatives pass.

The group decided on a number of criteria to determine where cuts should and should not be made.

At the top of the list of services to be protected from cuts is legislatively mandated service, such as police and fire protection. The second criterion protects revenue-producing employees, such as those who collect $2.5 million in licensing fees for the city.

The budget team also recommended funds that attract matching funds from other governmental agencies be a top priority. For example, the city's traffic safety management system costs the city $100,000 per year to operate but wins $1.2 million in matching grants from other governmental sources.

The team also listed other criteria, including the question of whether the city should fire employees in favor of maintaining employee benefits or vice versa.

City Treasurer Buzz Hunt questioned whether the city could expect $13 million in cuts because of the initiatives. That figure was taken from estimates made by the State Tax Commission, which will revise its projections Friday.

But, Hunt said, language in the initiatives exempts cuts from being made in the city's long-term indebtedness, meaning the city could recover $7.2 million of the projected $13 million loss.

It's possible that the city could raise taxes above the .75 percent property tax cap in the initiatives to pay off the city's exempted bonded indebtedness totaling $7.2 million, he said.

Among the suggested cuts made was a recommendation to eliminate general fund support of more than $5 million for the city's capital improvement department. Hunt said it was merely a proposal, but such a cut would leave the department, which administers programs such as sidewalk upkeep, to less than $2 million in federal funding.