ENCINITAS — Despite the overall slump in the economy, City Council received good news on the state of the city’s budget April 23.

According to the city finance director, Encinitas has maintained a steady stream of revenues largely unaffected by falling home prices and rising foreclosures seen in other areas of the county.

Finance Director Jennifer Smith presented the draft $53.5 million operating budget for the 2008-09 fiscal year. Although it shows $2 million less in revenue than projected, Smith said there were no anticipated cuts in jobs, services or programs.

Smith told the council that Encinitas is forecasting balanced budgets for the next five years with a reserve equal to 20 percent of expenditures.

City staff attributed trimming unnecessary expenditures at City Hall and the relatively good housing market for the stable budget.

Property taxes are the city’s main source of revenue according to the report. In contrast to surrounding municipalities, Encinitas anticipates a 2.9 percent increase in property tax revenue for the fiscal year beginning July 1.

“The most recent reports show Encinitas is one of the few areas in the region that has been insulated from the housing slump,” Smith said.

While no action was taken by the council during the meeting, members agreed to debate the plan further before the next scheduled budget hearing May 21.

At least one council member was concerned that the budget had not been carefully scrutinized. Councilwoman Teresa Barth said that the budget discussion should be scheduled during a meeting when no other business is on the agenda.

“We haven’t really had any discussion about the recession scenarios,” Barth said. “Should we talk about hiring freezes? We haven’t had any time to talk about that.”

Finance Manager Darlene Hill said that expenditure cuts at City Hall resulted in a $605,000 savings. Included in the cost trimming was the cut in hours for one full-time employee and personnel shuffling.

The projected budget shows an increase of $203,252 in revenue from fiscal year 2007-08. The 0.4 percent increase falls short of the expected $2 million revenue increase projected last year.

Smith said the shortfall was in part based on the $1 million less in projected tax and sales receipts. Income from permits, inspections and other development-related fees is expected to decline 10 percent, or $539,000, as a result of decreased construction and remodeling.

Revenues from red-light camera tickets, fines and other penalties are expected to increase by $60,000, to $878,000.

Members of the Leucadia 101 MainStreet Association requested an increase in the organization’s annual subsidy from the city from $20,000 to $30,000. The nonprofit group represents the interests of businesses along the North Coast Highway 101 strip encompassing Leucadia.

Although council members were supportive of an increase in funds for the group, they were unsure of where to find the money. Barth and Houlihan said they would be in favor of eliminating a public opinion survey. “I can find $15,000 in the budget,” Barth said. “Let’s skip the opinion survey and then we’ll have a wash.