FREMONT -- For the second consecutive year, city officials are offering positive budget news, saying the region's fourth-largest city finally is emerging from the Great Recession.

In a presentation to the City Council on Tuesday, city staff members said Fremont will have a balanced budget of $149.9 million for fiscal year 2013-14. That will allow the city to add jobs and fund the infrastructure for large proposed developments -- such as the ambitious Warm Springs and downtown projects, City Manager Fred Diaz said.

"How long the recovery will last is unknown," Diaz said. "But we've turned the corner for now, and our prospects for the future are much improved."

The city's financial resurgence has been aided by the state's improving economic condition, said Mike Sung, Fremont's finance operations manager. Unemployment in Fremont has dropped to 5 percent, outperforming the county's (7 percent) and state's (8.5 percent), Sung said. "Numbers like these haven't been seen before the beginning of the subprime loan and related housing market crisis in 2008," he said.

Also aiding the recovery are Fremont's strengthening property and sales tax figures. Property tax, which is the city's largest revenue source, will total $65.4 million for fiscal year 2012-13, officials said. That sum has been bolstered by significant increases in the average sales price of Fremont homes within the past year, said Harriet Commons, city finance director. "Property tax revenue is coming in at $4 million more than anticipated," Commons said.

City officials expect that good news to continue, projecting property tax revenue to rise by 4.5 percent next year because of new construction and sales and the continued increase in real estate prices, Commons said. Property tax revenue for fiscal year 2013-14 is projected to total $68.7 million, an increase of $3.3 million from the previous year, officials said.

Sales tax, the city's second-largest financial source, is just under $35 million for fiscal year 2012-13, Commons said. That figure approaches levels not seen in Fremont since 2001, in part, because of increased sales at Fremont Auto Mall, which soon is expecting more dealerships.

An increase in hotel revenue and shoppers in prime retails centers, such as Pacific Commons, also is helping, Sung said. For fiscal year 2013-14, officials project a sales tax sum of $37 million -- $2.1 million rise from the previous year.

Fremont plans to aid future tax revenue by creating a new permit coordinator position, to act as an ally for small businesses, Diaz said. "Small business is a part of our economic base, and we know it can sometimes be a challenge for them to navigate through the development process," he said.

The severe economic downturn forced Fremont to lean on its reserves to balance the budget. Officials now plan to replenish those funds and create a new "economic volatility reserve," to protect it during the next recession. That decision will increase the city's reserve level to 15 percent -- or, about $31 million of the general fund. The city's reserve level was lowered to 12.5 percent in 2009-10, which helped Fremont balance its budget during the downturn's dark fiscal days.

"It's almost an 'economic paranoia reserve,'" Diaz said at a budget presentation before the City Council meeting. "When you have an economy that can turn on a dime, what good is a five-year or 10-year plan?"

The first public hearing on the budget is scheduled for June 4, and council members will consider adopting it a week later.

Contact Chris De Benedetti at 510-353-7011. Follow him at Twitter.com/cdebenedetti.