The Fayetteville City Council Thursday heard the first reading of the $9.7 million Fiscal Year 2011 budget that will take effect in August.
City finance staff expect to see an 8.89 percent decrease in property taxes for the coming year, but a 7.44 percent recovery in local option sales taxes.
The proposed $9.7 million general fund budget represents a decrease of 4.6 percent from the current $10.12 million budget.
The hiring freeze, implemented several years ago, will continue, with the loss of four additional positions through attrition. Again next year, the proposal calls for no increase in employee benefits.
Finance Director Lynn Robinson said city sales tax, building-related fees and property tax revenues continue to be impacted by the recession. Local option sales tax revenues were down 9.88 percent for calendar year 2009, but showed some recovery in the first four months of 2010. Robinson is projecting a 7.44 percent increase for FY 2011.
Property taxes are another matter. Decreasing tax digest figures showed a 0.78 percent decrease in FY 2010, with a projected 8.89 percent decrease for FY 2011.
Additionally, Robinson said Water and Sewer revenues continue to be impacted by the economy, conservation and weather conditions. Impact fees and sewer proportionate fees are also being negatively impacted, she said.
Budget reduction measures previously implemented include a citywide hiring freeze, the reorganization or realignment of several city departments, no payment for annual leave, a reduction in future salary increases, voluntary reduction in salaries and reduced work hours and increased benefit costs to employees.