PLEASANT HILL -- The latest economic data show the recovery is still chugging along in Pleasant Hill, where new retail outlets and eateries are drawing customers.

The city collected nearly $2.3 million in sales tax in the second quarter of the fiscal year, up about 9 percent from the same quarter in the previous year, according to Mary McCarthy, the city's finance director.

In the first quarter, the $1.3 million in sales tax was 6 percent higher than the same period in fiscal year 2011-2012.

Sales tax dollars make up more than a third of the city's general fund revenue. Pleasant Hill is on track to meet the projected $6.9 million in sales tax included in the two-year budget the City Council adopted in June, according to McCarthy.

More than half the city's sales tax dollars come from the consumer goods sector which was bolstered last year by the opening of In-N-Out Burger, Big 5 Sporting Goods and the Safeway gas station.

Zachary's Pizza opened last month in downtown Pleasant Hill; the Corner Bakery Cafe is scheduled to open in the spring and Nordstrom Rack in August.

The long-delayed project to renovate the southern half of the Crossroads Shopping Center also is picking up steam. On March 19, the Planning Commission is scheduled to review SyWest Development's plan to build a two-story, 73,176-square-foot Dick's Sporting Goods store and renovate the 21,788-square-foot building that housed the Bally Total Fitness Gym. The proposal calls for demolishing the "dome" movie theater.

The two-year budget includes a projected $366,000 deficit and a reserve fund of $10.4 million.

"How are we doing in terms of working steadily to reduce the deficit?" Councilman Jack Weir asked McCarthy on Monday during her presentation of the quarterly financial report.

"I think it will be a little lower than projected," she replied.

Pleasant Hill is also reaping savings from the health care and retirement benefits cuts included in the four employee contracts the council has approved since fall 2011. Salaries and benefits make up nearly three-quarters of the city's general fund expenditures.

From July to December 2012, the city had $533,000 in total payroll savings compared to the same period in 2011, according to McCarthy. She has projected total salary and benefits savings of $900,000 this fiscal year.

In addition to higher employee contributions toward medical and retirement costs, the savings also reflect changes in health care premiums, CalPERS rates and personnel.

As part of the compromise the council reached last year, Pleasant Hill has been paying less for elected officials' health coverage since the November election. Currently, the city pays 50 percent of the Kaiser Permanente premium and $200 per month for those who decline health insurance.

Lisa P. White covers Martinez and Pleasant Hill. Contact her at 925-943-8011. Follow her at Twitter.com/lisa_p_white.

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