[Durham INC] City of Durham Presents Proposed FY 09-10 Budget
Amy.Blalock at durhamnc.gov
Mon May 18 20:28:54 EDT 2009
CITY OF DURHAM
Office of Public Affairs
101 City Hall Plaza
Durham, NC 27701
For Details, Contact:
Beverly B. Thompson
Public Affairs Director
(919) 560-4123 x 11229
(919) 475-2362 (cell)
Beverly.Thompson at durhamnc.gov <mailto:Beverly.Thompson at durhamnc.gov>
For Immediate Release: May 18, 2009
Durham City Manager’s Proposed Budget Maintains Core Services During Today’s Tough Economy
Balanced Budget Includes No Property Tax Increase; Minimal Impact on Services to Citizens
Durham, N.C. – Saying that this year’s budget reflects citizen priorities while recognizing the impact of the current recession on anticipated revenues, Durham City Manager Thomas Bonfield presented tonight a proposed budget totaling $344.4 million, a 3.1 percent decrease from last year’s adopted budget.
According to Bonfield, this year’s budget preparation was extraordinarily difficult given the current national recession and its impact on the City’s two largest sources of revenue property taxes and sales taxes. “We have been closely watching current economic trends, and it appears that residential real estate and personal property tax growth will remain mostly stagnant, sales tax revenue will decline, and that overall City revenue growth will also decline for the next fiscal year,” Bonfield said. “Under these tough circumstances, we were charged with developing a budget that continues to deliver vital public services without raising the property tax rate. We began this process facing a projected $24 million to $40 million deficit, and we had to make some tough decisions in order to deliver a balanced budget to the Council – and ultimately to the community.”
Bonfield recommended a total preliminary budget for fiscal year 2009-10 of $344.4 million including: a general fund budget of $206.6 million that funds most core City services; revenue assumptions that include a 1.7 percent increase in the assessed valuation of real property along with a 3 percent decline in sales tax. The proposed budget also maintains at 11 percent the City’s fund balance (operating reserves).
Citing the feedback received from Durham citizens through the course of the budget development process, Bonfield stated that this proposed budget will continue the City’s focus on public safety; the delivery of quality core services; support of youth program and activities; improved City infrastructure, including further reduction in the City’s backlog of deferred maintenance; continued neighborhood engagement and revitalization; continued neighborhood-based economic development; and the timely delivery of capital projects.
“We made a concentrated effort through our Coffee with Council sessions, our first-ever Citizen Engagement Workshop, other community meetings, the Capital Improvement Program Advisory Committee, and our first-ever dedicated preliminary budget Web page to get at the heart of what our citizens felt we should and should not be spending their tax dollars on,” Bonfield said. “We heard consistently that these were the priorities of our taxpayers and that services and programs that support these priorities must remain funded above all others.”
With the property tax remaining at $0.54 for $100 of assessed value, the proposed budget will establish a $750,000 neighborhood revitalization fund; a $500,000 deferred maintenance fund; and will include an average water and sewer rate increase of 9.25 percent for a typical residential customer, which is less than the 9.5 percent projected earlier this year.
Bonfield stressed that the impact on services to citizens was top-of-mind in developing this proposed budget, which is why no programs have been eliminated, but some services affected, including the suspension of new street light requests; the suspension of new traffic calming requests; and adjusted operating hours at some City recreation centers based on utilization.
Bonfield also noted that non-city agency contributions will be reduced to $480,155, which will fund 36 non-city agencies to provide arts, public safety, youth, community development programs and other activities for Durham citizens.
Bonfield also highlighted anticipated assistance from the American Recovery and Reinvestment Act, with grants supporting more than $14.9 million in projects ranging from energy-efficiency initiatives to transportation and transit-related projects to employment and training services.
Bonfield stated, however, that the impact on City employee benefits is significant, but necessary to avoid program cuts and additional layoffs. “Balancing this year’s budget has been especially challenging and has involved some difficult decisions. It’s never easy when you eliminate jobs, because you ultimately are affecting not only those employees, but their families as well,” Bonfield said. “These proposed benefit reductions are necessary to present a balanced budget that allows this organization to focus on our highest priorities.” Earlier this month, 35 City employees from various departments were notified that their positions were included in a total of 113 slated to be eliminated.
In addition, pay-for-performance increases will not be awarded in the coming fiscal year as well as funding for general employees in the second year of the Comprehensive Compensation and Classification Study. However, police officers and firefighters will receive three percent anniversary increases, totaling $1.8 million. Other employee benefit reductions include decreased contributions to 401(k) plans; increased healthcare insurance premiums; and the City’s Longevity Plan payments will be reduced depending on years of service and eventually phased out completely.
The FY 2010-2015 Capital Improvement Program (CIP) was also presented to the City Council in a companion document to the proposed budget. The capital improvement budget includes $71 million for both new projects and to complete existing projects.
Bonfield also noted that the City continues to maintain its excellent fiscal status as evidenced by three areas: a continuing AAA bond rating by all three rating agencies, the highest measure of financial security and one attained by only 19 of the nation’s more than 22,500 cities; unqualified opinions by independent auditors of the City’s financial statements and compliance with major federal and state grants; and a strong Audit Services Department, ensuring compliance with applicable laws, policies, and procedures.
Bonfield closed his presentation with a look to the future, recommending the City begin developing a three-year financial plan and a six-year “fundable” capital improvement program plan as well as a review of the existing fund balance policy. Bonfield also noted that next year he would like to implement a dedicated street resurfacing fund and a dedicated transit system fund.
A public hearing is scheduled for Monday, June 1, 2009, at 7 p.m. in the City Council Chambers at Durham City Hall, 101 City Hall Plaza. Final budget approval is set for the Monday, June 15, 2009 Council meeting. Copies of the proposed budget will be available by the end of business tomorrow at the Durham County Library, the Durham City Clerk’s Office, the City’s Department of Budget and Management Services, and on the City’s Web site at www.durhamnc.gov/citybudget.
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