PEMBROKE — The financial condition of Pembroke is improving, an auditor told the the town council at its Monday meeting.

The report, which was presented by John Masters, of the S. Preston Douglas and Associates firm, shows an increase in revenues for the 2011-12 fiscal year. The unassigned portion of the General Fund is at 12.8 percent, well above the 8 percent threshold required by state law. The town’s unassigned portion had been in the negative in recent years.

The audit shows that property tax revenue has increased from $400,000 in 2005 to $1 million. Sales tax revenue, which had been declining, has also rebounded.

“We’re seeing that in our municipal audit clients as well but not as big as a rebound that occurred with the town of Pembroke, and I think that attests to your economic activity that has taken place here,” Masters said.

Masters said that the town’s growth has contributed to a $200,000 increase in the town’s garbage collection fees and a $2.5 million balance in the town’s Water and Sewer Fund. The town’s payroll decreased slightly during the last fiscal year.

More than $2.1 million in federal and state grants was dispersed during the last fiscal year.

Town Councilman Allen Dial encouraged the council to continue to find ways to save money.

In other business, the council approved a request for a conditional-use permit from Johnny Ozuna, who plans to open Big Boys Tattoos at 621 Union Chapel Road.

“I don’t care anything about a tattoo parlor,” Dial said. “I don’t care anything about tattoos at all, but if we have a business that is legitimate that meets the criteria of what we have in town, than I would support that business. It doesn’t matter how I personally feel about it.”

In other action on Monday, the council:

— Heard from Reed Whitesell, of Holland Consulting Planners Inc., who presented closeout information on a $553,000 Community Development Block Grant that paid for construction of a 10-bed clinic for pregnant women who are also substance abusers.

— Heard from Loretta Smith, chairman of the Pembroke ABC Board. She will provide monthly updates on efforts by the town to reopen its ABC store, which has been closed since October 2008.

— Awarded the administrative contract for a Community Development Block Grant, which will replace a lift station at Locklear Court, to Holland Consulting Planners Inc. Replacement of the lift will cost $389,700 and work, if approved, would begin next summer.

— Heard from Bryan Graham, of the Pembroke Recreation Complex, who said that the department raised $5,240 during a recent golf tournament. Graham said the department will hold a corn-hole tournament on Dec. 15 at the Pembroke Fire Department. The entry fee is one unopened toy, which will be provided to needy children for Christmas.

— Set a work session for Dec. 17 at 11 a.m. to discuss changes to ordinances addressing tattoo parlors, lot requirements, video sweepstakes operations, sign regulations and property subdivisions.