Facing a $22.5 million shortfall, Louisville Mayor Greg Fischer presented his first city budget to the Metro Council that maintains basic services and dodged major layoffs in the coming fiscal year.

The spending plan avoided painful cuts and tax increases by finding a number of one-time savings measures such as using $3.5 million in drug money seized from police raids, saving $2.8 million on heath care costs for two months, and exchanging $1.3 million in council Capital Infrastructure Funds with federal municipal aid through a volunteer program.

“This budget was cobbled together with more creativity than cash, and more stopgaps than solutions,” says Fischer. “We still have a major structural deficit—expenses don’t match revenue—and it’s my goal to eliminate that deficit during the next four years.”

Fischer’s plan isn’t without sacrifices, however. The city will forgo Metro employee raises for the second time in three years and the mayor has ordered all non-union employees making over $70,000 to take a week of unpaid furlough to save $250,000.

The mayor is also asking other employees who earn less than $70,000 to take a week furlough through a volunteer system to save an additional $1 million.

Still, the administration was pleased to announce reopening libraries on Sundays, and a number of new investments, including $500,000 for a new alert system to warn residents about emergencies via e-mail, phone and text messaging.

Fischer says that money was earmarked in response to a chemical plant explosion in the Rubbertown neighborhood earlier this year.

Other key investments the mayor highlighted in his first budge were $100,000 to the Affordable Housing Trust Fund, another $500,000 for deigns of a new southwest regional library and $4.9 million to non-profit organizations that help citizens such as arts groups and community ministries.

During a press briefing Thursday, the mayor said  upcoming budgets will be worse and that he’s asking external agencies to come up with alternative funding options, looking for unions to make more sacrifices and that council discretionary spending will be on table for cuts in the future.

Chief Financial Officer Steve Rowland says the administration was fortunate this year in finding creative ways to close the gap, but city officials will have to make fundamental changes in future spending plans.

“We’re pleased that we’re able to present a balanced budget to the city council without resorting to layoffs, but I think there will be some changes in order to bring the spending in expenditures in line with one another,” says Rowland. “But as the mayor said, he’s looking at all expenditures and he’s asking people to participate with him in the future. And we’re going to have conversations with the council about core city services and where NDF and CIF expenditures fit in within that framework.”

For the next four weeks the council will debate and revise the $712 million spending proposal, which will fund Metro Government’s operation through June 30, 2012.