Christmas is coming early for the city of Napa, with City Manager Mike Parness recommending the restoration of programs and jobs cut last summer when the city’s financial situation was considered more dire than turned out to be the case.

Parness will ask the City Council Tuesday night to approve $1.8 million in new spending, including salaries for two additional police officers and a second full-time code enforcement officer, as well as funds for a stronger graffiti removal program and more sidewalk repair.

Two employees who lost their jobs doing fire education in the schools and telephone repair would have their positions restored.

Because revenues turned out to be much higher than projected and expenses much less, Napa is in the enviable position of having its first fully balanced budget in five or six years, Parness said.

“It’s encouraging. It’s nice to be on the track back,” Parness said Friday.

The city manager’s budget request includes the equivalent of 15 full-time positions, which would help Napa meet the public’s demand for services, he said.

Napa has about half the number of city employees per capita of most California cities, which is why services like code enforcement have been inadequate, Parness said.

Restoration of two patrol officers will allow the Police Department to devote additional resources to gang and traffic enforcement, the city manager said.

Expansion of Code Enforcement from one full-time position to two, plus part-time help, will enable the city to tackle a backlog of citizen complaints, he said.

The city of Napa Fire Department would get two additional administrative support personnel as well as restoration of the public education officer who goes into the schools.

Police will get funding to restore the Drug Abuse Resistance Education program or a D.A.R.E. equivalent approved by the Napa Valley Unified School District, Parness said.

Community Resources would get money to restore Fourth of July fireworks, Music in the Park and teen events.

The city’s financial turnaround has been both breathtaking and embarrassing to top administrators. After advising the council to cut millions last June from the 2007/08 and 2008/09 budgets, Parness reported in September that the city might have $6 million more to spend than had been predicted.

City officials immediately rescinded agreements calling for labor groups to offer contract givebacks totaling $800,000, and told Parness to return in November with his best account of city finances.

The biggest contributor to the city’s financial misestimation, Parness said, was out-of-date financial software that had administrators guessing what recent revenues and expenditures were.

“Operating departments were ‘flying blind,’” Parness said in this week’s budget memo to council. The current year’s budget was put together last spring, relying on spending and revenue reports that were in some cases a year old, he said.

Napa is in the process of installing more than $1 million worth of new financial software to prevent a recurrence, Parness said. By putting in considerable manual labor, the city knows its current financial status, he said.

When revenues for 2006/07 were tallied this fall, hotel tax and property tax were each more than $1 million greater than projected.

The city is taking several million dollars in new revenue and spending savings to refill reserve accounts that had been drained during the city’s hard years, Parness said.

The city anticipates spending $62.6 million in 2007/08, which is $2.9 million more than the original budget.