Windsor's budget is benefiting from an improving economy, with sales and property tax revenues rising steadily.

A mid-year review conducted by the Town Council Wednesday shows property tax revenues up 13 percent compared with the same time last year. Sales taxes for the first quarter of this fiscal year were up 10 percent over the same period a year ago.

"I am very pleased to see evidence of economic recovery starting to take place, and it should help us stabilize in the future," Councilwoman Debora Fudge said. "I'm feeling way more comfortable than I was a year ago."

Finance Director Heather Ippoliti said Windsor is "in good, solid, financial shape."

But not all is rosy. New construction activity is still down. Building permits and license fee revenues are 13 percent below the previous year at this time, with only $179,000 collected. And 2011-12 was dismal for new construction, with budget assumptions failing to meet expectations.

"We're hoping for some recovery in this area," Ippoliti said.

In other areas, the picture continues to improve. The town's sales tax revenue hit a low in fiscal year 2009-10, but has been slowly climbing back, with an 8 percent increase in 2010-11 and 9 percent in 2011-12.

Hotel bed taxes are also up 11 percent compared with last year. When the Hampton Inn opened in 2009, the town's bed tax revenues increased by 23 percent. In the following two fiscal years, those revenues increased 8 and 9 percent respectively.

Fudge said Windsor remains strong fiscally, even after having to return almost $9 million to the state when redevelopment programs were abolished.

She touts Windsor as the most financially healthy city in Sonoma County, as measured by the amount of reserves versus general fund expenditures.

The $5.9 million in reserves accounts for 37 percent of the town's $15.9 million general fund, well above the 25 percent recommended guideline.

That cushion was possible because Windsor budgets are very conservative, Fudge said. "We made it through deep recession with high levels of reserves."

The Town Council got some other welcome news Wednesday. Burbank Housing Corp., which develops low-income housing, was able to pay $1 million for impact fees it owed the town in connection with the 65-unit Windsor Redwoods project, which opened two years ago north of Shiloh Road off Old Redwood Highway.

You can reach Staff Writer Clark Mason at 521-5214 or