Mainly to cope with the cost of increased payments for voter-approved debt, the Durham city manager proposed a 2001-2002 budget that would raise taxes by just under 5 percent.
The $252 million preliminary budget, presented Monday to the Durham City Council by Interim City Manager Greg Bethea, would increase spending by 8.6 percent from this year if the council approves it June 18.
Bethea cast the proposal as a budget that maintains all existing city services while simultaneously adding new expenditures for better maintenance of city facilities, improvements to city transportation, an additional police beat around the new Streets at Southpoint mall and more firefighters.
"What we've tried to do is to provide the same level of service while at the same time increasing the amount of maintenance of city services," Bethea said.
For the average taxpayer, however, that means a 4.8 percent increase in taxes. The proposed rate of 54.2 cents per $100 of property value, although technically lower than last year's rate, would provide the city with an additional $3.4 million in tax revenue because the city revaluated market property values this year.
Out of that $3.4 million, $2.2 million would go toward the increased debt payments on bonds for infrastructure improvements that Durham voters approved in 1996.
Bethea said the tax increase was unfortunate, but necessary to avoid cutting existing programs. "At the end, we were not going to be able to provide that same level of service or address those additional needs without the tax increase," he said. "My realistic assessment is the tax increase is needed now."
The city projected in 1996 that approving the bond referendum could lead to a tax increase of six cents per $100 over a six-year period, but until last year, it did not raise property taxes at all. Last year, the council approved a one-cent increase to fund a new parking garage for the planned American Tobacco development.
Mayor Nick Tennyson, who saw the budget for the first time Monday night, said he was not surprised by the tax increase, especially in light of the increased pressure from the debt.
"I think this is the management's sincere best effort," Tennyson said. "If there is going to be an avoided tax increase, it will be because we don't do something, not because we all of a sudden get smarter."
Council member Pamela Blyth, however, said she was concerned by the budget. "The administration will be hard-pressed to convince me to vote for a tax increase," she said.
Another major expenditure in Bethea's proposal is a $1.6 million increase in facilities management funds, earmarked for an initiative to improve city buildings that have been neglected in the past.
"We had not been maintaining those facilities to the level that we should have been," he said. "It is easier to talk about the new things rather than maintaining the things that we already have, but I think now is the time to do that."
Bethea's proposal would add eight new maintenance positions to the city staff.
The budget would add a net total of 37 employees to the city's payroll, adding 67 positions while cutting 30. Eight of the 30 positions that would be eliminated are filled by current employees. Of the 67 new positions, 42 would be firefighters needed to bring the city into compliance with new standards approved by the National Fire Protection Association, Bethea said.
And in the preliminary budget, Bethea allocated enough money for a 7 percent raise for every employee. Every employee would receive a 2 percent cost-of-living increase, and those who qualify for a merit-based raise will receive an additional 5 percent increase. In recent years, the vast majority of city employees have qualified for the merit raise.
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