FAYETTEVILLE — City Council members reviewed details of a budget plan Saturday that anticipates more revenue and calls for more spending in 2013.

Mayor Lioneld Jordan’s $134.9 million proposal represents a $13.6 million — or 11.2 percent — increase over last year’s budget.

His proposal, which predicts revenue in the city’s general fund will be enough to cover general fund expenses, is the first balanced budget since 2007.

“We’re finally back to being able to finance that size of budget,” said Paul Becker, city finance director.

City Council members will consider adopting the budget Nov. 20.

A big reason for the budget increase is a projected 2 percent sales tax growth.

Sales tax collection was up $1.1 million — or 5.4 percent — through the first nine months of 2012 compared with the same period last year.

The city levies a 2 percent sales tax on purchases, in addition to a 6 percent state sales tax and a 1.25 percent county sales tax.

Half of the city sales tax pays debt, most of which is associated with a sewer improvement project that began in 2002 and a transportation improvement bond program voters approved in 2006.

The other half of the city sales tax, which residents overwhelmingly voted to extend in October 2011, is split between the city’s general fund and capital improvement budget. Sixty percent goes to the general fund. Forty percent pays for capital projects.

More than three-quarters of the city’s general fund pays for employees’ salaries and benefits. General fund expenses are expected to increase by 5.6 percent — from $34.1 million in 2012 to $36.1 million in 2013.

Most of that increase can be attributed to employee raises. According to Becker, it will cost $428,000 to sustain raises the City Council approved in March.

Jordan on Saturday proposed 4 percent average salary increases for city employees in 2013, but he only budgeted for half of the cost of those increases ($400,000). Jordan said he’ll evaluate whether the city can afford full 4 percent raises when city officials close the books on 2012 in the first quarter of next year.

The mayor also plans to spend additional general fund money on increased health insurance premiums (up $183,000 compared to 2012); higher police and fire pension costs (up $158,000); more bookings at the Washington County Detention Center (up $54,000); and a new wellness program for city employees ($40,000). Jordan’s budget proposal calls for an $100,000 increase to the amount the city transfers to outside agencies, such as the Fayetteville Public Library and Ozark Regional Transit.

The general fund could grow further if city officials hire a grants coordinator as several aldermen recommended Saturday.

“Northwest Arkansas is well positioned to be competitive with grants,” said Matthew Petty, Ward 2 alderman. “We just don’t have the capacity right now to take advantage of them.”

Petty and Sarah Lewis, Ward 4 alderwoman, said a grants coordinator position could easily pay for itself and would take some of the burden off other employees who are stretched thin. According to Don Marr, Jordan’s chief of staff, the city hasn’t filled more than 20 positions open since 2009.

The 2013 budget proposal calls for a range of capital improvement projects, including in-house street paving projects ($1.8 million); trail construction ($1.5 million); a new system for city billing and payroll ($1.2 million); library material purchases ($375,000); and sidewalk improvement ($115,000).

Jordan said additional sidewalks could be built using the city’s share of a new half-cent statewide sales tax for highway and transportation projects.

The city’s water and sewer fund is estimated to grow by about $4 million — or 13 percent. David Jurgens, utilities director, said a lot of that increase is for Lake Sequoyah dredging and other capital projects expected to reduce nutrient loads in local waterways in expectation of stricter permit requirements next year from the Arkansas Department of Environmental Quality.

The city’s solid waste fund is slated to grow $1.8 million — or 18.3 percent — in 2013. According to Becker, city officials plan to expand the Fayetteville transfer station and add a concrete slab at the city’s compost site.

Jordan proposed putting $563,000 next year toward a regional park in southwest Fayetteville and spending $700,000 to remodel Wilson Park Pool and a concession stand at Walker Park’s youth baseball complex. The city’s parks development fund receives the bulk of its money from half of a 2 percent tax on hotel stays and food purchases in city restaurants.

City officials expect to end 2012 with more than $12 million in general fund reserve. That’s more than double the amount officials are required to keep.

Petty said Saturday he wants City Council members to meet in early 2013 and come up with a plan for spending some of that reserve.