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San Ramon is in better financial shape than officials expected, thanks to a slow but steady growth in revenue and less-than-projected spending.

The city's general fund "is projected to show better than anticipated revenue sources. The revenue categories showing improvements are all related to the economy. Current year expenditures are projected to come in lower than budgeted," a mid-year report presented to the city's finance committee said. "The General Policy reserve draw down is estimated to be $1.5 million, compared to a $2.5 million original budget estimate."

"The good news is that we're projecting for this fiscal year, revenues coming in are about $700,000 above what we budgeted," said Eva Phelps, the city's administrative services director.

Phelps said that's been boosted by bumps in the city's sales tax, its hotel tax and franchise fee. Sales taxes rose by $200,000 as did its property tax, although officials had expected more from property taxes. Hotel tax rose by about $100,000 and franchise fees increased by $200,000, although other taxes and fees did not increase to match projections.

Beyond that, she said, the city expects to spend about $400,000 less than anticipated, primarily though unfilled jobs. The city has been in a hiring freeze 2008, although City Manager Greg Rogers has been given permission to move some temporary employees to fulltime to keep them from moving to other cities that are now hiring.

Phelps' report said home values are rising, household spending is increasing and job creation continues to improve. San Ramon's unemployment rate is 3.4 percent, below both California's 9.8 percent unemployment and the nation's, which stands at 7.8 percent.

Through the middle of the fiscal year, San Ramon brought in more than $37.5 million, while officials projected getting less than $36.8 million, according to the report, which will be presented at the next City Council meeting.

The report said expenditures are expected to run to about $37.5 million, which is $400,000 below what was budgeted.

"The current year estimate assumes expenditures over the last six months of the year to be higher than the first six months of the year. Expenditures are typically higher in the last six months of a year than in the first six months," Phelps' report said. "The expenditure estimates reflect position vacancy savings. Each department has estimated expenditures through the balance of the year in the non-salary and benefit categories.

Spending for the first six months of the fiscal year was 38 percent of the total budget and 45 of what was projected, the report said.

The city has held several public meetings to receive input and set priorities for its 2013-14 budget.

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