MISSION VIEJO – The City Council voted 4-1 to pass the $47.6 million city budget at its meeting Tuesday night. Councilwoman Cathy Schlict dissented. The council voted on a two-year budget cycle that extends to 2013.

The budget was balanced without using reserves, according to a city staff report. The budget has $1.8 million in reductions from the previous year’s budget, but all core services and service levels are maintained. The city conducted and analyzed a community survey to help in prioritizing programs and to avoid doing across the board cuts.

One of the reductions in the budget is the salaries of 17 staff members. Twelve staff members retired or left the city the past two years and the new budget accounts for around five more to be cut. City Manager Dennis Wilberg said there will be no lay offs; everything will be done by attrition.

“There’s been a hiring freeze and we’re not filling positions if staff has retired or left the city,” said Councilwoman Trish Kelly. “We ask our employees to do more with less.”

The city expects to receive around $47.8 million in revenue for 2011-12 and around $48.3 million in 2012-13. Half of the general fund revenue comes from property taxes and the staff believes the improved housing market will make for more revenue for the city. Sales and use taxes make up 30 percent of the general fund revenue.

“For the last three quarters the amount of sales tax revenue has been above where we projected,” said Mayor Pro Tem Frank Ury. “For my money, from where I sit, having $47 million coming in next year, I’m very comfortable with this budget.”

The projected expenditures for 2011-12 are $55,147, which is about $2,000 less than the current year. The city spends money to maintain the police services, Norman P. Murray Center and recreation centers’ normal operating hours, crossing guards, after school programs and other city services.

Schlict however said the optimistic budget doesn’t factor in the worsening economy.

“This is a flyover budget,” she said. “It lacks specific spending.”

The current capital improvement projects budget is $5.9 million and will increase by $660,729 and $2.2 million for the 2011-12 and 2012-13 budgets respectively. These funds go to projects such as the La Paz Road widening and the Marguerite Aquatics and Tennis Center construction.

Next year, the Mission Viejo Library’s operating budget will have $154,501 less than the current budget but is expected to increase to its usual funding by fiscal year 2012-13.

The city’s reserves will remain at 52 percent and 51 percent of General Fund revenue in fiscal year 2011-12 and fiscal year 2012-13, respectively, according to the staff report.

“Most cities across California strive for 15 percent in the bank,” Mayor Dave Leckness said. “We have 51 percent.”

Councilwoman Rhonda Reardon said the budget is not perfect, but it is balanced.

“I would prefer that we could go in and start cutting things,” Reardon said. “I’m going to vote for this budget tonight because I don’t have an alternative; I can’t come up with something better.”