FORT THOMAS - This is a town with two identities.

There is "The City of Beautiful Homes," a motto of sorts that pays homage to the stately residences that sit along Fort Thomas Avenue (the city's main thoroughfare), that line quiet side streets, and that rest atop the hills that slope to the Ohio River.

And then there is "Caketown," where residents are know as "Cake Eaters." That is a mostly tongue-in-cheek but sometimes nasty reference to the perception that Fort Thomas is full of snobs and social climbers who have little to do with those from outside the community, or with the non-natives who live in Fort Thomas.

Mayor Steve Pendery said the characterizations of the place he calls "typical small-town America" are exaggerated or flat-out wrong.

"There are a lot of beautiful homes in the city, and some of them are large and expensive," said the mayor. He is a 43-year-old lifetime Fort Thomas resident, an insurance business owner who lives on Manor Lane with his wife, Dana, and their two children, Chase, 4, and Allie, 18 months.

But most dwellings are modest, older homes that are beautiful because the residents "have a lot of pride in their homes and their community, and that makes a big difference on how a community thinks and how a community looks," Mr. Pendery said.

"Our community looks great because the people care. They want a nice place to live, and they work to keep it that way."

The city, which grew up around a military base that opened on the south end of town in the 1880s, is a bedroom community populated largely BY the senior citizens who raised their families here and younger couples with children still in school.

Susan and Dennis Birkley are natives, and they can't think of anywhere else they would want to raise their 16-year-old son, Nate, who attends and plays football at Highlands High School.

"The neighbors here are nice, the streets are nice, people take care of their homes and people are friendly," Mrs. Birkley, 44, said from behind a desk at the Book End bookstore on North Fort Thomas Avenue.

"But it's the school that people really love. The education is great, and the sports are wonderful. As far as sports programs go, Highlands always has been the best and always will be the best around here. They win and they keep kids active and out of trouble."

Mr. Pendery says the school system, along with the low crime rate, full-time fire department and the efficiency of the local government, are among the community's great assets.

"I think it starts with the schools," he said. "Fort Thomas is known as having one of the best if not the best school system in the state, and that makes a difference when you look at the quality of community."

The Fort Thomas schools have achieved among the highest scores in the region and the state on Kentucky's statewide assessment tests.

Yet residents are being asked to pay more for the schools and approve a utility tax hike in a June 3 special election.

The 3 percent tax on natural gas, electricity, telephone, cable TV, water and sanitation bills would raise about $550,000 a year for the Fort Thomas school district, starting in August. The money is needed, school officials say, because the district has seen its funding reduced under the Kentucky Education Reform Act.

For the past three years, Fort Thomas has had the same funding per pupil, schools Superintendent Larry Stinson has said.

With the limited funding from the state, "it gives an added burden to our taxpayers to maintain the programs that students are used to," Mr. Stinson said.

But even with financial concerns looming, the school system is what keeps natives here, brings those back who have moved away and attracts new families, said Campbell County District Court Judge Michael "Mickey" Foellger.

"We're like homing pigeons," Judge Foellger said of natives like himself and his wife, Sandy, who moved out of town but came back to raise their children, Christopher, 4, and Allison, 2.

"It's primarily the school system that attracts people, but it's also more than that. I can remember growing up how much I loved living here. There were kids everywhere, there was always something to do and the community, with the beautiful trees and lots of greenery, was very pastoral," Judge Foellger said in a description of Fort Thomas in the 1950s that sounds much like the Fort Thomas of today.

"I wanted my kids to have those same kinds of experiences, and I think we have that here," he said.

Billy Fawcett, an 18-year-old Highlands student who lives on Lockwood Place, agrees with Judge Foellger on most counts.

"The streets are nice, the people are pretty friendly, I have a lot of friends and I like schools here," he said. "But there's not a lot for (teen-agers) to do. It gets a little repetitive. I think that's why a lot of people leave after they graduate. They get a little tired of the same old thing."

But "the same old thing" is what makes Fort Thomas an attractive market to potential home buyers, said Ken Warden, who operates Warden & Assoc. Realtors right in the center of town, at the corner of Fort Thomas and Highland avenues.

"People love the tradition, the spirit of community, the pride people take in the community," Mr. Warden said.

He points to two annual activities - the Fourth of July Parade and Highlands football games - as examples of the community spirit that is such a strong selling point.

"People just love types of community events here. The whole town practically turns out for the parade. They love celebrating anything about Fort Thomas," Mr. Warden said.

Patty Laber, 34, has lived in Fort Thomas all her life and said she loves the city even more now that she has children.

"It's not unusual for me to be outside and see kids running from one house or one yard to the next," said Ms. Laber, who lives on Manor Lane with her husband, Mike, and their two children, Ryan 4, and Allison, 1.

"The people here are very friendly, and this is very safe, very traditional community. People look out for one another and care about their neighbors and friends," she said.

The city's location and proximity to downtown Cincinnati - "we're 10 minutes from Fountain Square" - appeal to prospective home buyers, Mr. Warden said.

"We are close to the core employment areas and close to shopping and development without having a lot of major development," he said. "Yet, we have shops, stores and restaurants right in the center of town that people can walk to."

And walking is something Fort Thomas residents love to do. They walk down "The Avenue" as Fort Thomas avenue is known; around the city's twin reservoirs; through Tower Park, which at one time was a military base; up and down Highland Avenue; or just about anywhere there is a sidewalk.

The city has two small business districts, along Fort Thomas Avenue in the center and southern parts of town. Both feature several small, locally owned shops and restaurants such as Fort Thomas Pizza - known for its hoagies - Bauer's Bistro, the Olde Fort Thomas Pub, the Midway Cafe, Marshall Granger Jewelers and the Book End book store.

"The great places to walk are one of the things that make living here so nice," said Barb Leising, who lives on North Crescent Avenue with her husband, Mike, and their three children - Ryan, 20, Bridget, 13, and Corey, 9.

"I can walk up to Tower Park, I can go along the avenue, I can walk down to the reservoirs," Mrs. Leising said as she walked her dog near her home.

"There aren't a lot of communities you can do that in."