The spending plan for the upcoming year, which begins July 1, 2008, is more than $6 million higher than last year's budget. The budget passed on a 6-0 vote at the board's regular Tuesday meeting. Last year the city's total spending package was slightly more than $12.3 million. "I thought the entire process went well," said Warrenton Director of Operations Terri Thorn. "We asked all of the department heads to keep operational expenses the same and they all did a good job of meeting that goal." "I believe this budget represents a step forward for the city," added Mayor Greg Costello. "We were able to fund two major upcoming projects, the indoor rec center and the city hall building, plus give raises to all city employees." The three major components of the $18.7 million budget include nearly $6.5 million dedicated to the city's general fund expenditures, nearly $4 million in water and sewer fund expenditures and about $7.8 million in total capital sales tax fund expenditures within all departments. Two major projects, construction of an indoor recreational center and improvements to the city hall building, are responsible for the increased budget according to Thorn. The city hopes to begin both projects later this year. The primary construction focus will be the city's new indoor recreation center to be built along Market Street behind the Warrenton 8 Cinema Complex. Construction could begin this fall on the proposed 40,000-square-foot facility with a projected cost of about $7 million. The city will finance the project cost with bonds. In addition, city officials expect to begin work later this year on a $1.35 million project to renovate the current city hall and police department complex. The project will be funded through an $854,000 allocation from the general revenue fund and another $300,000 from the water and sewer fund. "The good news about this year's budget," said Thorn, "is that we were able to fund all the capital improvement projects we thought were necessary and important." Thorn said, the city's new outdoor athletic complex which opened last year, will be expanded to include two additional baseball fields and one new multipurpose field. The additional baseball fields will bring the number of fields to six, and could afford the city an opportunity to host more national softball and baseball tournaments. City officials also project spending more than $561,000 for water system improvements in the southern part of the city and an additional $571,000 for water and sewer line additions throughout the city. "Some of those projects are carryovers from the 2007-08 fiscal year which weren't completed," Thorn said. "Both the Highway U waterline improvement and the Clara Avenue waterline projects are ongoing." Estimated total revenue, meanwhile, is projected at approximately $15.6 million. Last year's budget called for proposed revenue of around $12 million. The city projects total water and sewer revenues to reach slightly more than $2.4 million. The city will raise water and sewer rates by 2 percent starting with its August bills. Thorn said a major difference in projecting revenue for the upcoming year involved the way sales tax income was figured. Thorn said the 2008-09 budget revenue estimate did not include an increase in sales tax projections for the first time in recent city history. City officials figured the sales tax revenue income at $2.7 million, or the actual figure it collected in the 2007-08 fiscal year. "We're fortunate not to be projecting a decrease," Thorn said. "But we felt sales tax revenue would be roughly equal to what it was last year." The idea of projecting actual revenue which funds city projects, said Thorn, is to use a cautious, yet realistic, approach. "We always have been ultra conservative when we project revenue," Thorn said. "We (city officials) feel that's the best approach to use and it's seemed to work well for us in past years. "So I don't think you'll see us change that policy," Thorn added. "We don't want to plan a project, get halfway through it, then realize we're not going to be able to completely finance it." The city's total operating expenses for 2008-09 are projected at roughly $5.6 million, which include capital expenditures and debt service needs. The operations budget provides a 3 percent raise for all city employee salaries. In addition, health insurance premiums are projected to increase by 6 percent. The city is in "pretty good" shape with regard to its overall economic outlook, according to Thorn. "What we don't have now is the big, dramatic increases we were experiencing three years ago," said Thorn. "But overall, I think the mayor and the board of aldermen do a very good job of having their fingers on the pulse of the city," she added. "They do a nice job of anticipating the future."