The City of Lawrence didn’t have to dip into its “savings” account after all.

The city’s general fund ended 2005 by collecting $900,000 more in revenue than it spent, according to a year-end financial report that city commissioners will review at Tuesday’s meeting.

“I came out having a fairly decent smile at the end of the year,” City Manager Mike Wildgen said.

When city commissioners approved the budget more than 18 months ago, there was speculation they would have to dip into the city’s fund balance – which is the amount of unspent money the city has accumulated over the years from past budgets.

The savings account now stands about $14 million, but preliminary estimates project that the city may need to use up to $8 million of the fund balance to cover increased spending on streets, homeless services and other issues that commissioners deemed a priority.

The 2005 budget received an unexpected boost as a result of short-term interest rates rising from about 1 percent to about 3 percent in 2005. The higher interest rates generated an additional $719,000 compared with 2004.

Property tax collections increased by $540,000, despite the mill levy dropping slightly. A 6.5 percent increase in valuation led to the additional property taxes.

Sales tax collections were the only revenue source that sparked concern. Sales tax collections grew by 2.8 percent. That’s important because city administrators are counting on a 4 percent increase in sales tax revenue in 2006.

“It may be tough to reach that 4 percent number, but I’m not ready to say it is out of the realm of possibility,” said Ed Mullins, the city’s director of finance.

If the 4 percent projection doesn’t hold up, other revenue sources will need to grow faster than projected or else the city will have to dip further into its fund balance.

On the expenditure side, every city department except Parks and Recreation stayed within its budget. Parks and Recreation went $52,000 over budget as a result of being forced to take over maintenance of the privately owned Memorial Park Cemetery after a court determined its owners were not meeting state maintenance standards.

Overall, revenue for the city’s general fund increased by 5.9 percent to $48.3 million. Total spending in the general fund increased by 16.1 percent to $47.4 million.