Tuscaloosa Mayor Walt Maddox proposed recommendations for the 2011 city budget to the City Council Wednesday.

The mayor projected $109,603,130 for the general fund budget, a nearly $1.5 million increase from last year.

The budget will not include increases in sales or use taxes, according to a presentation by Maddox.

“It’s challenging, but it’s manageable,” Maddox said, “If there was a theme for this year’s budget, it would be ‘cautiously optimistic.’”

In a memorandum to members of the city council, Maddox said he and city’s revenue director met several times to ensure conservative but realistic revenue projections.

The mayor said the budget is the city’s blueprint to improve the quality of life for all citizens.

A challenge faced by the mayor when determining the 2011 budget was incorporating the Blue Cross Blue Shield’s recommendation of a significant increase in premium rates, which would impact the city’s health insurance fund.

However, in the proposed budget, Maddox left the health insurance budgets at the 2010 level.

“We will budget an additional $300,000 from the general fund transfer to the health insurance fund,” Maddox said, “but we will leave this money in the general fund unless our claims experience in 2011 mandates that we ask the council to authorize the transfer.”

Another challenge was projecting sales taxes, business licenses and other key revenue sources, Maddox said.

“Since January, the average monthly sales tax revenue has been 4.4 percent,” Maddox said in his presentation.

Councilman William Tinker said gas prices were also a concern when developing the budget.

As of Aug. 19, the average fuel price was $2.10 per gallon for unleaded and $2.20 for diesel. The proposed 2011 budget reflects $2.25 per gallon for unleaded and $2.50 for diesel.

“It’s a tight budget,” Tinker said. “A little tighter than it was last year, but over all, we’re doing good.”

Before a final budget is decided, the finance committee will hold hearings in September to discuss various items included in the budget such as revenue projections and agency funding, Maddox said.

After discussing the mayor’s recommendations for the budget, the council denied an alcohol license to Little Italy Pizza on The Strip.

Councilman Lee Garrison, said the denial was based on the applicant’s negligence to list past criminal records on the application for the license.

The applicant, one of the three partners who own Little Italy Pizza, had two DUI arrests on his criminal record. His last arrest was in 2002.