WASILLA -- City Mayor Verne Rupright told Wasilla businessmen that the state of the city is "generally strong, but with a note of caution."

Rupright, in an update last week before Greater Wasilla Chamber of Commerce members, said city officials are closely watching sales tax revenues.

According to city chief financial officer Cheryl Deariso, Wasilla had a dip in sales tax revenues in November -- the first such dip in at least the last five years.

But sales tax receipts in December were looking slightly better than last year's figures.

In November, the city collected $965,316 in sales taxes, down 4 percent from the same month the year before when the city took in $1,004,970. Sales tax revenues bounced back up in December to $1,173,309, nearly 7 percent over December 2007 collections.

Deariso said those numbers reflect only the 2 percent sales tax used for general city operations.

The city also collects an additional half percent sales tax that goes directly to pay off debts remaining from construction of the Wasilla Multi-Sports Complex.

Sales tax revenues in Wasilla fluctuate from month to month with more sales in the fall and winter than early in the year.

Deariso said her spreadsheet shows a steady growth of 7.5 to 9 percent in sales tax revenue over the past five years. The city has been collecting a 2 percent sales tax since 1993, and, in its most recent fiscal year, took in $10.3 million.

"We're hoping we'll have something just as good (this fiscal year), but we're not being optimistic," she said, noting that the national economy is in the tank and Alaska is starting to feel the effects as well.

Rupright said the city is preparing for a 5 percent cutback across the board.

He is leaving an economic development planner position unfilled and is reconsidering some city expenses, such as periodicals and sponsorships. But a $750,000 capital spending plan will continue, he said, and he is seeking money for improvements to the city sewer system and a new library.

Find Daily News reporter Rindi White online at adn.com/contact/rwhite or call 352-6709.