The Fayetteville City Council

will have its first hearing on the city's

proposed $30.04 million budget for 2004-2005 at Thursday night's

council meeting.

The figure includes all city expenditures, including $8.85 million for

general fund expenditures, $11.75 million for water and sewer expenditures

and $6.51 million for capital projects in addition to other separate

smaller funds operated by the city.

The general fund portion of

the city's budget would increase of

1.49 percent from the current fiscal year according to the current recommendation

to council. This increase was due to increases in employee benefit costs,

finance director Lynn Robinson and City Manager Joe Morton noted in a

memo to council.

The budget includes no additional

personnel but several significant capital expenditures for the city's new police department and municipal

court building and improvements to the city's water and sewer system.

City staff is recommending that the millage rate remain at 3.033 mills,

which would result in a net tax increase due to an increase in the tax

digest through increased property values on existing homes and new home

construction.

Public safety, including police

and fire services, takes up 60 percent of the city's general fund

budget with a projected expense of $5.39 million. Public works ($892,000)

and general government ($967,000) taking

up roughly 10 percent each of the general fund, according to city staff

projections.

The city's capital projects fund, totaling $6.5 million, includes

$3.2 million for the police station and municipal court building which

will be financed, increasing the city's annual debt service. The

capital projects fund also includes $1.63 million for pedestrian improvements

on Lanier Avenue -�but $1.3 million of that will be paid for with

grant proceeds from the Atlanta Regional Commission's Livable Centers

Initiative program.

In their memo, Morton and

Robinson noted that the proposed budget "is

one of the most austere budgets developed in recent years."

While revenues such as property

taxes, franchise fees and building fees have slowed, the city's

operating expenses have continued to increase, mainly due to providing

competitive salaries and increasing health insurance

benefits, the memo stated.

Revenues for sales taxes have increased, largely due to the renegotiation

of the percentage the city receives, Morton and Robinson noted.

In fact, sales and use taxes

accounted for 32 percent of the city's

projected general fund revenues for the coming fiscal year. Property

taxes come in second at 18.5 percent, with business taxes at just under

16 percent, fines and forfeitures at 9.95 percent and franchise taxes

at 9.78 percent.