Raleigh residents won’t see too many changes with the new budget, but city employees will.
City Manager Russell Allen’s proposed budget for the 2011-12 fiscal year is $635 million, a 2.5 percent increase from this year.
Although there were no layoffs, the budget proposal eliminates positions. It also features cuts and reductions for the third consecutive year, reducing employee pay increases and benefits, cutting operational expenses, altering the maintenance schedule, delaying equipment purchases and minimizing pay-as-you-go capital investment.
“All of these things, clearly as you know, we are going to have to recover from,” Allen said. “These are generally short-term choices that you make. Short term is now running into longer term.”
He said residents would see little impact on their everyday services and taxes would not be increased. Police officers and firefighters were excluded from any reductions.
The proposed budget will eliminate 35 vacant positions, suspend merit pay, reduce contributions to supplemental retirement funds by about one third, defer reclassifications, reduce tuition reimbursement limits and eliminate the Spanish proficiency program.
The major expenses for the city continue to be related to health care and state retirement contribution increases. There is also the $1.4 million parking shortfall, the opening of new public facilities — such as Pullen Amusement Center and Buffaloe Road Aquatic Center — and the increase in fuel costs to add to the expenditures.
Health care costs will increase to about $3.7 million. The proposed budget is picking up about $2 million and the rest would be contributed by the employees.
“It does have an impact upon employees and their benefits and their take-home pay,” Allen said.
Employees have two health care options, but both plans require monthly premiums. Currently, employees do not have to pay premiums. If an employee takes an annual Health Risk Assessment and doesn’t smoke, these premiums can be waived or discounted.
While property tax revenues aren’t declining, there has been almost no growth since last year, though the city’s expenses are increasing, said Allen. The same can be said for sales tax revenue, which only grew from $58.7 million to $61.3 million since last fiscal year. Allen noted that the city will miss its sales tax projection by about $2 million.
Other changes include:
- Reduce art agency grant funding by 50 cents per capita to $4
- Human services agencies cut 10 percent
- Other agencies cut 10 percent
- The average customer’s monthly sewer rate will increase by an average of $3.83 a month
A public hearing will be held at 7 p.m. on June 7 at City Hall. The council will begin budget work sessions June 6. The new fiscal year begins July 1.