Nevada City appears to be in good financial shape despite a bleak economy, according to an audit presented to the City Council this week.

The city has $2 million in cash — $1 million more than at this time last year. The general fund has a balance of $800,000.

“This is primarily due to the cash tax revenue anticipation note received from the county in August ’08 of $1 million for city projects,” according to a city memo.

City staff said it expects a decline in sales tax and transient occupancy tax and a potential increase in collection for utilities.

The city will not be filling the vacant city clerk position for the foreseeable future. It’s also possible that some future vacancies may not immediately be filled because of the drop in sales tax receipts, said city finance director Catrina Andes.

Program and special revenue received for the fiscal year 2008-09 are 8 percent higher than the like period a year ago, the memo said.

“Program and special fund expenditures for the 2008-09 fiscal year are 60 percent higher than this same time in fiscal year 2007-08,” the memo said. “This increase is primarily associated to the $626K CalPERS side fund payoff, an increase in debt service principle and interest for (some) loans of $50K.”

The city will get a clearer picture of the city’s financial health when sales tax reports come due in January, said City Manager Gene Albaugh.

“We’re taking a very conservative approach” to staffing, Albaugh said. “It looks like we’re in better shape than other cities appear to be.”

He added, “The city clerk position may be filled if the economy changes, but right now, I don’t see that happening. We’re not going to have any new positions for a while.”

Unlike its neighbor to the south, Nevada City is not seeking to limit hours at City Hall or furlough any workers. Grass Valley is poised to close City Hall on Fridays and furlough workers starting Dec. 26.

To contact Staff Writer David Mirhadi, e-mail dmirhadi@theunion.com or call 477-4239.