By DAVE HAMRICK
Staff Writer

Fayetteville residents will get a stepped up Main Street program, a slight tax cut and a variety of capital projects in the city government's fiscal 1999 budget.

The city's employees will get about a half million dollars in new pay and benefits aimed at reducing turnover in the spending plan, unanimously adopted by City Council last week.

Homeowners can anticipate a two-tenths mill reduction in property taxes in fiscal year 1999, about a $7 yearly savings for a $100,000 home, as a result of the $10.7 million budget. The tax rate will drop from 3.83 mills to 3.63 mills if projections run true, about a 5.2 percent reduction.

Even so, property tax revenue is expected to rise about 10.7 percent due to new home building and this year's county-wide reassessment of property values. Fayetteville's taxable property is expected to increase in value by 15 percent.

The budget document does not address whether taxpayers also will see taxes rolled back to compensate for the reassessments. Raven said that will be addressed when the final tax digest is approved this fall.

Finance director Lynn Raven expects a 21 percent increase in sales taxes, which will fund 26 percent of the $5.8 million general fund budget, the largest tax revenue category. Another category, franchise fees, will rise a whopping 41 percent to take third place as a general fund source, providing 13 percent of revenue.

The general fund budget, which includes all services funded directly by taxes, will increase 15.33 percent compared with 1998 expenditures of $5.07 million.

Actual operation of the city will increase only about 3 percent, said Raven. The bulk of the increase comes in an employee retention plan, which provides large salary increases for employees in their first and third years of employment.

Raven said the city lost 25 percent of its employees to retirement or other jobs in 1996, and almost 20 percent in 1997.

The pay package includes a 2 percent across-the-board cost of living increase, merit pay increases based on performance evaluations, plus the retention program.

In addition to the general fund, fueled by taxes, the city budget includes three enterprise funds, fueled by fees:

u Water and sewer expenditures for 1999 are $2.49 million, a slight decrease from 1998 expenses of $2.5 million due to the fact that the city will buy less water from Fayette County in 1999. Recent opening of a new water treatment plant increases the city's capacity to produce its own water.

The city is projecting $3.05 million in revenue for water and sewer.

u Impact fees will provide $649,337 during 1999, and the budget proposes to spend $885,489. The deficit will be made up from the fund's balance, said Raven, and from state Department of Transportation grants.

The money will be used for major transportation improvements, including the realignment of traffic around the Ga. Highway 92/Jimmy Mayfield Boulevard intersection.

u Capital projects will consume $1.55 million in 1999, including a $1.15 million bond issue for Fayetteville's ambitious Main Street program. That program is working to restore the historic Hollingsworth House, buy and restore the Holliday-Dorsey-Fife House, and continue to improve the Courthouse Square to attract businesses and visitors.

That's good news to the Holliday House Association, said association spokesman Vel Dean Fincher. "We have worked hard for five years" in efforts to restore the historic house just off Fayetteville's Courthouse Square, said Fincher, adding the members felt all along that the best way to turn the home into a tourist attraction was city ownership.

"We will commit to you to continue with the work," she added. The association and the city can now "work hand in hand on the restoration," she added.

City budgets for the next five to 10 years will include a half-mill of property tax devoted to paying off the bond issue and maintaining Main Street programs.

Other capital projects include upgrading City Hall's air conditioning, an underground storage tank for the fire and police departments, improvements to the front and a new roof for the City Hall fire station, drainage and improvement projects, and a brush chipper for the public works department.