PUEBLO, Colo. -

Difficult decisions will be made to settle Pueblo's $3 million debt.

Pueblo City Council met Tuesday night to look over City Manager's Sam Azad's proposed 2014 budget.

Azad's budget that he showed tonight is if initiative 1A was passed. 

Initiative 1A would save the city $1.8 million and would provide funding to the State Fair, Nature and Raptor Center, Pueblo Zoo, Sangre De Cristo Arts and Conference Center, Historic Arkansas Riverwalk of Pueblo, and Pueblo Animal Services.

Initiative 1A would drive the debt down to $1.2 million.

Azad's budget includes increases in general taxes, sales and use tax and decreases municipal court fines, funding for street lights, non-department contractual budget and government funded subsidy to parking enterprises.

But one of the biggest sacrifices is laying off two city employees to balance the budget, which would be a first in Pueblo's history.

Azad didn't say which department these employees worked at, but said they would have the opportunity to apply for other jobs in the city if they qualify.

Azad said their would be consequences if 1A doesn't pass.

"It's going to be difficult, then we have to start juggling money to bring in from other areas of the budget."

City council members said they will review Azad's