OAKWOOD — No tax increase is planned for Oakwood in 2011, but with the economy still in neutral, the city isn't expecting any kind of spike in revenues either.

"It's about as flat as you can get," Mayor Lamar Scroggs said of the budget during a work session Monday at City Hall.

Oakwood is proposing a $3.6 million general-fund budget, which becomes effective Jan. 1, with the city having to dip into its reserves by $315,000 to make ends meet.

"It doesn't really alarm me too much on the reserves," City Manager Stan Brown said. "If you look at our previous budgets, anytime we do projects or have land that we're buying, we go into that recognizing the fact that we've accumulated some funds for those purposes."

The budget increased this year because of some land the city bought as part of a long-range plan to develop the downtown area.

The city also projects special purpose local option sales tax revenue to drop to $360,000 from $620,000 in this year's budget.

"This is not unlike what Hall County, Gainesville and Flowery Branch are seeing," Brown said. "We're just seeing sales tax money coming in at a much slower pace than expected."

The city is proposing to use $236,000 in SPLOST proceeds to go toward the land purchases and spend the remaining $124,000 for its annual paving program, down from the $200,000 "we were proposing to do each year," Brown said.

"What we're looking at is if the money's not coming in at the pace it was coming in, we can't spend it at the pace we had proposed," he added.

The city also is hoping to eventually extend sewer into the downtown area but has designated no money toward that effort next year.

One budget item that stirred conversation among council members is a plan to hire an additional police officer for traffic enforcement.

"It just appears to me we're pushing the police department to be a revenue source," Councilman Gary Anderson said.

"If people don't break the law, they're probably not going to get a ticket," Scroggs responded.

Anderson went on to add, "I'd rather have an officer investigating drugs, or maybe a murder, rape or burglary, than out there writing somebody a ticket for going 15 miles over the speed limit."

The city budgeted $850,000 for all fines, speeding and otherwise, in revenue this year and is projected to end the year with about $653,000. The 2011 budget calls for $779,000 in fines.

Oakwood is expected to hold a public hearing on the budget at 6 p.m. Nov. 1, with budget adoption set for Nov. 8.

City Council plans to cast a vote on the 2011 tax rate at its regular monthly meeting, set to begin at 7 p.m. Monday. Final approval is scheduled for 4 p.m. Oct. 18.

The tax rate now is 2.48 mills, with 1 mill equal to $1 for each $1,000 in assessed property value. Property is assessed at 40 percent in the city.

Tax bills are scheduled to go out Dec. 1.