Officials said the city government is well placed to proactively deal with the problem and will continue monitor the economy.
"The City of Fayetteville has always used conservative estimates in producing the budget," said Lisa Smith, the city's chief financial officer. "We continue to have a strong bond rating and clean annual audits and expect to weather this economic downturn."
Smith has compiled a list of expenditures that can be deferred to reduce spending by about 3 percent. City Manager Dale Iman said department directors will aim to maintain service while cutting spending.
Iman said Fayetteville was expected to see flat sales tax revenue, declining revenue from building permits and increased costs for energy and food. The city must also deal with the nationwide credit crunch, the city manager said.
Despite those challenges, Iman said, Fayetteville leaders do not anticipate taking more drastic measures, such as a hiring freeze. The city will be prepared to adjust as the economy changes, Iman said.