SPARKS — The City Council approved a final budget for the 2011-12 fiscal year on Tuesday during a public hearing on the measure.

The 4-1 vote in favor of the city manager’s budget recommendations will close a $4.6 million deficit through a number of fiscal assumptions and post-dated actions.

Councilman Ron Schmitt, however, opposed the budget out of concern that it will not be balanced come July 1, the start of the fiscal year.

More than $2.2 million in cuts had previously been approved as part of the Sparks Sustainable Services Initiative, which reorganized and restructured city departments and personnel.

The latest budget draft would generate an additional $400,000 in savings through a hiring freeze on all current position vacancies. An expectation that another $300,000 in savings will be made through job attrition (about three positions) during the next fiscal year is built into the budget and based on past trends, according to finance staff.

If these latter cuts are not made, the city manager will have the flexibility to reduce capital projects spending to cover the needed savings.

About $21 million has been approved for the city’s Capital Improvement Plan, which includes road and traffic signal improvements, facilities upgrades and Victorian Square enhancements.

City finance staff has asked that they be given until March 2012 to determine whether it is necessary to tap capital

spending. Retrofit lighting and IT refresh projects will be put on the back burner until then as a result.

Schmitt said he also opposed a plan to not fund the stabilization, or rainy day, reserve to its full measure of $1.1 million.

The proposed budget would reduce a transfer to the stabilization fund by $900,000 in order to help cover the deficit.

A sticking point for the current budget recommendations lies in an assumption that public employee unions, namely police and firefighter groups, will approve a wage and health care reduction to the tune of $684,000.

The wage loss will be tied to a reduced retirement benefits increase.

Meanwhile, the city is asking all employee groups to accept a reduction in health care benefits in lieu of a 6 percent salary reduction. Collective bargaining negotiations are ongoing.

If neither the health care or wage savings are agreed to, the city manager has recommended that layoffs cover the remaining needed savings.

The city has until December to choose between these two options.

“I believe it leaves too much unknown over the next six months,” Schmitt said.

He described the pending changes to the budget as a change in philosophy from the way the city has operated in past budget cycles to reduce deficits.

Kevin Cavanaugh, the Sparks firefighters union chief, said he thought building in such delayed measurements to the budget violated state law.

Finance director Jeff Cronk has said it does not.

At any rate, Cavanaugh said that if layoffs come, it would be at the city’s discretion.

He believes there is plenty of money to support public safety operations at current funding levels, citing $200,000 the will be applied to the stabilization fund as an example.

The budget reduces the city’s labor costs to about 84 percent of total expenditures, down from a 90 percent high this current fiscal year but more than an original target of 78 percent.

Cavanaugh called these changes arbitrary.

The budget also would leave an ending fund balance of 8.3 percent of total expenditures, or about one month’s worth of operating costs.

Expenditures for the next fiscal year total just less than $50 million, down more than $6 million from actual spending just two years ago.

Finance staff has reported a greater than $16 million drop in base revenue since the economic recession hit in 2007.

“This year definitely has been the most challenging because we had to make the biggest cuts that we’ve ever had to do,” Mayor Geno Martini said. “Everyone’s going to have to suffer.”