Revenues from

the city's hotel-motel tax have picked up significantly, according to

numbers back from the first half of Peachtree City's fiscal year.

The hotel-motel

tax shortfall has shrunk from its original projection of 37 percent to

17 percent, equivalent to $73,000. This was a major concern for the City

Council due to the nationwide tourism decline after the terrorist attacks

of Sept. 11.

But with other

budgetary problems cropping up, city officials want to maintain the $834,000

of "impounded" funds from this year's budget.

In a memo to

the City Council, Finance Director Paul Salvatore said revenues from interest

earnings could create a $200,000 shortfall by the end of the year. At

Thursday's council meeting, he said other items likely to come in over

budget include the city's health, dental and worker's compensation program,

due to a higher number of claims so far this year.

The city's

pension plan also needs an extra $153,000 this year, mainly due to the

downturn in the stock market and also due to an increase in the number

of participants and their salaries, Salvatore said in the memo.

The city can

also expect a significant increase in its property insurance premiums,

Salvatore told council.

Another reason

to keep the impounded funds is that the city doesn't yet know the impact

of the recent sales tax holiday, which waived the state-collected sales

tax on a number of purchases for two days, Salvatore said. That also diverts

the city's portion of those sales taxes, which is expected to have some

affect on projected sales tax revenues.

Most of the

anticipated shortfalls may be cancelled out by staff savings from position

vacancies, but that would negatively affect next year's budget, Salvatore

warned in the memo.

The majority

of the hotel-motel tax revenues are diverted to the city's Airport Authority,

which operates Falcon Field, and Development Authority, which operates

the city's tennis center and amphitheater. Both authorities have agreed

to hold back funds until the end of the fiscal year to help the city recoup

any shortfall in the hotel-motel tax collections.

The City Council

also raised the hotel-motel tax rate from 5 to 6 percent to offset the

predicted shortfall; it will be lowered