[Durham INC] Durham’s Proposed FY24-25 Budget Highlights Employee Compensation and Capital Improvements

Mon May 20 20:05:44 EDT 2024

[Title: City of Durham Communications Department]

News Media Contact
CommsMedia at DurhamNC.gov<mailto:CommsMedia at DurhamNC.gov>

News Release
For Immediate Release: May 20, 2024

Durham’s Proposed FY24-25 Budget Highlights Employee Compensation and Capital Improvements

3.85 Cents Tax Rate Increase Proposed

DURHAM, N.C. – City Manager Wanda Page presented her proposed Fiscal Year (FY) 2024-2025 budget at tonight’s City Council meeting, which includes a property tax rate increase of 3.85 cents to support increased employee compensation.

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What You Need to Know

  *   New proposed property tax rate of 59.62 cents per $100 of assessed value, which is a 3.85 cents increase.
  *   Budget supports increased employee compensation and capital improvement projects.
  *   Community members invited to share feedback at the June 3 budget public hearing<https://www.durhamnc.gov/Calendar.aspx?EID=9083>.

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Page’s recommended total proposed budget is $667.8 million, which is a 9.47% increase from last year’s adopted budget, primarily due to increases needed for employee market-rate compensation adjustments.

Page recommended a new property tax rate of 59.62 cents per $100 of assessed value, which is an increase of 3.85 cents from last fiscal year’s approved rate of 55.77 cents. If approved by City Council next month, the new tax rate will generate a City of Durham property tax bill of about $1,517 on a house valued at $254,421, which is the median home tax value in Durham according to the Durham County Office of Tax Administration.

According to Page, the funding needed to bring employee salaries in line with market rates is the primary factor driving a property tax rate increase in this year’s proposed budget. “A critical component of this year’s budget is to implement our Classification and Compensation Study<https://cityordinances.durhamnc.gov/OnBaseAgendaOnline/Documents/ViewDocument/WS-Published%20Attachment%20-%2016946%20-%20PRESENTATION%20-%202%20-%20FY24%20CLASSIFICATION%20AND.pdf?meetingId=642&documentType=Agenda&itemId=37962&publishId=214067&isSection=false>, which found that all of our pay plans are below market rates,” Page said. “It’s no secret that the City of Durham, like most municipalities and private-sector employers, is experiencing a shortage of workers in several areas, especially our Public Safety and Operations departments – areas that are critical to providing vital services, including keeping our city safe, providing safe drinking water, and collecting solid waste for our residents. Fairly compensating our employees for their hard work and dedication to our community will help us ensure that our organization remains competitive to retain our employees and attract new employees to fill our many vacancies.”

In Page’s proposed budget, in addition to funding market-rate salary adjustments, she is also recommending pay-for-performance increases of 5% for general step plan employees, 4% to 6% for open range employees, and 5% for sworn police and fire employees. The Durham Minimum Livable Wage for City employees will also be increased from $18.46 per hour to $19.58 per hour.

Funding for three new full-time positions is included to increase staffing resources for the work of the Planning and Transportation departments. Funding is also included to support the Guaranteed Income Program, the Hayti Reborn Justice Movement, the Immigrant Legal Defense Fund, the Durham Expunction and Restoration (DEAR) Program<https://www.deardurham.org/>, the Durham Low Income Homeowners Relief Program<https://www.dconc.gov/county-departments/departments-f-z/social-services/aging-and-adult-services/low-income-housing-relief-lihr>, and to establish a new Office of Survivor Care, and a new Summer Camp Grant Fund.

Page also shared more about Forever Home, Durham<https://www.durhamnc.gov/4593/Forever-Home-Durham>, the City’s $160 million program to create affordable opportunities for renters and homeowners as well as to stabilize neighborhoods. Four affordable housing projects to be completed this fiscal year will add 468 units. Eight additional projects will begin or be under construction next fiscal year adding another 943 units once completed.

Page’s proposed spending plan includes funding to continue fare-free service for all GoDurham<https://godurhamtransit.org/> riders through June 30, 2025. New funding is also included to support safety initiatives in the Transportation Department’s Vision Zero Durham program<https://www.durhamnc.gov/2995/Vision-Zero>, which aims to eliminate traffic deaths and serious injuries.

The proposed CIP budget includes $232.1 million for new projects and to continue completing existing projects. Funding is included for $84.7 million in General Capital projects that were deemed a priority and essential to the City’s capital infrastructure needs. More than 40 projects are included in the proposed CIP, such as lead soil remediation in parks<https://www.dprplaymore.org/516/Soil-Property-Testing>, school zone speed reductions and trail crossing improvements, Guess Road improvements for safer bicycling, neighborhood bike routes<https://www.durhamnc.gov/3763/Neighborhood-Bike-Routes>, and bike lane vertical protection. There is an additional $147.4 million of CIP funding dedicated to Water and Sewer, Stormwater, and Solid Waste projects. The is also $15 million to support annual ongoing maintenance of streets and sidewalks.

A $2.66 monthly increase for Tier 2 residential water and sewer customers<https://cityordinances.durhamnc.gov/OnBaseAgendaOnline/Documents/ViewDocument/WS-Published%20Attachment%20-%2016936%20-%20PRESENTATION%20-%203%20-%20FY%202025%20WATER%20AND%20SEW.pdf?meetingId=642&documentType=Agenda&itemId=37943&publishId=214062&isSection=false>, and a $1.55 monthly increase for Tier 2 residential stormwater customers<https://cityordinances.durhamnc.gov/OnBaseAgendaOnline/Documents/ViewDocument/WS-Published%20Attachment%20-%2016921%20-%20PRESENTATION%20-%202%20-%20ATTACHMENT%20A%20-%20STORMWAT.pdf?meetingId=642&documentType=Agenda&itemId=37963&publishId=214097&isSection=false> are also included, which were approved during the City Council’s May 6 regular business meeting.

Page also shared that the City is moving ahead with the process to place a $200 million General Obligation (GO) Bond<https://cityordinances.durhamnc.gov/OnBaseAgendaOnline/Documents/ViewDocument/WS-Published%20Attachment%20-%2016999%20-%20RESOLUTION%20-%202%20-%20RESOLUTION%20NOTICE%20OF%20INTE.pdf?meetingId=644&documentType=Agenda&itemId=38379&publishId=217033&isSection=false> on the ballot in November 2024. If the Local Government Commission approves, Durham voters will be asked to vote on two projects:

  *   Bond #1: $85 million for Durham Parks & Recreation’s Splash & Play Project<https://www.dprplaymore.org/496/Splash-Play-Project>, which is the former Wheels Fun Park, Long Meadow, and East End Parks.
  *   Bond #2: $115 million for improving sidewalks and streets across the city.

If approved by voters, the City will issue the bonds<https://cityordinances.durhamnc.gov/OnBaseAgendaOnline/Documents/ViewDocument/WS-Published%20Attachment%20-%2016947%20-%20PRESENTATION%20-%202%20-%20GO%20BOND%20REFERENDUM%20PRES.pdf?meetingId=642&documentType=Agenda&itemId=37960&publishId=214064&isSection=false> in two parts, starting in FY2025-2026. To cover the cost of the bonds, there may be a future tax rate increase of 2.95 to 3.45 cents, depending on interest rates at the time of the bond issuance. Page shared that using GO Bonds is the most affordable way to fund these large construction projects because the City has a AAA-credit rating, which is the highest possible credit rating, enabling it to borrow money at the lowest interest.

City Council will review the proposed budget details at special work sessions on Wednesday, May 29, and Thursday, May 30. These in-person work sessions will begin at 9 a.m. in the City Hall Committee Room and will be livestreamed to the City’s YouTube channel<https://www.youtube.com/CityofDurhamNC> and website<https://durham.granicus.com/player/camera/7?publish_id=542"=&redirect=true>.

A final budget public hearing<https://www.durhamnc.gov/Calendar.aspx?EID=9083> is set for Monday, June 3, at 7 p.m. with final budget approval on Monday, June 17, at 7 p.m. To review the entire proposed budget, visit the City’s Budget and Management Services Department webpage<https://durhamnc.gov/204/Budget-Development-Process>.

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