After years of budget reports calling for reductions, Petaluma City Council members heard a relatively sunny first-quarter budget update Monday night.

Though it's only three months of numbers, the financial picture looks positive for the first time in long time, City Council members said Monday.

"This is good news," Mayor David Glass said. "It's not great news because there is so much pent-up demand… But it's the first time in five years we've actually gone through the process where we've had a positive infusion rather than looking for cuts."

The council voted unanimously Monday to make several minor adjustments to the budget ordinances approved earlier this fiscal year.

Finance Director Bill Mushallo said the early figures are trending up, though only slightly, for the beginning of the 2013-2014 fiscal year spending plan.

"I'm happy to say the first-quarter sales-tax revenues were higher than where we originally projected," he said.

Sales-tax revenues came in just under $100,000, or about 1 percent, more than expected, he said.

While the figure is small, it may reflect a positive trend, particularly with the Target-based East Washington Place shopping center open for business and Deer Creek Village, anchored by Friedman's Home Improvement, opening next year.

Property tax assessments of Petaluma properties went up more than expected, Mushallo said, although exact figures won't be available from the county until next month. Property-tax transfer fees, paid when properties are sold, also increased.

"We had a really strong August," he said, but cautioned weighing that figure too heavily until it is determined whether the increase is a trend or a jump caused by the sale of a few high-priced parcels.

Spending for the quarter is just under what was planned, he said.

The finance department conducts a more in-depth analysis of all city departments at the mid-year checkpoint in February, when firmer retirement-fund estimates also will be available from the state.

Petaluma, like cities throughout California, continues its struggle to maintain funding of lucrative employee benefits and pensions that were promised in the economy's heyday.

The city's current $35 million spending plan has rebounded in the past two years as severe cuts were made. The general fund budget was cut from $48 million in 2008 to about $32 million in 2011-2012.

The cuts, including cutting jobs and negotiated pay reductions, allowed the city to begin refunding its reserve fund this year, which had been drained to nearly empty five years ago.

You can reach Staff Writer Lori A. Carter at 762-7297 or