Fayetteville City Council June 21 heard the first reading of the proposed FY 2008 budget, set to become effective Aug. 1.

The General Fund budget is proposed at $10,117,568, a 4.26 percent increase over the current year. Sales tax revenues are expected to increase by five percent as are property taxes at 7.5 percent due to growth and reassessments. City finance staff recommended maintaining the current 2.99 millage rate. Budget hearings will continue July 19.

Also at the meeting, the council approved the much-discussed residential maximum occupancy ordinance and group home ordinance. The ordinance addressing residential parking was tabled until the July 19 meeting.