Though revenues are increasing slightly, the city continues to cut back while also trying to avoid employee layoffs and maintain the current standard of city services.
Raleigh City Manager Russell Allen released his 2012-13 budget to City Councilors this week. The budget does not increase property taxes but could include some fee increases.
City financial staff estimates 2011-12 sales tax revenue to be about $66.1 million, which is about $2 million more than what was projected. With that upward trend in mind, staff is projecting $68.8 million in revenues for next year's budget.
But sales tax revenues are only part of the equation. While property tax revenues have historically increased 3 percent each year, revenues have remained fairly stable since 2010.
“[We] don't have a lot of new revenue coming in from property taxes,” Allen said.
But Allen said he doesn't expect to propose any additional property tax increases other than the bonds that were approved by voters last November.
With revenues remaining fairly stagnant, the city will look to cut costs and maximize efficiency in all areas, particularly in the Personnel Department. While city employees can consider their positions safe, they will likely continue to pick up extra work as vacant positions go unfilled or are eliminated completely.
The fate of other benefits, such as merit raises or bonuses, is still in the works, but Allen said he would like to build $3 million into the budget to provide for some kind of compensation.
The only department that would likely see new hires is the Emergency Communications Center, which needs seven additional positions in order to keep pace with 911 calls.
Increasing expenditures are adding to the budget challenge as Raleigh continues to grow. The city's population increased 6.5 percent since the start of the recession, leading to an increase in public safety dispatches, garbage collection and public works maintenance.
The city is also experiencing its own pain at the pump as fuel costs continue to rise. They city already spends more than $6 million on fuel annually and is predicting a moderate increase of $1.2 million. But Allen said that that number could change.
At the start of the economic downturn, the city began deferring low-priority maintenance.
“Some is going to come due this year,” Allen said. “We can't keep continuing to do deferrals.”
That includes equipment replacements that have been on hold, like new garbage trucks, police cars and fire trucks.
While the stormwater budget remains in good shape, the city will be reviewing the solid waste services budget for possible fee increases.
As residents continue to conserve water after the 2008 drought, consumption rates remain low resulting in lower fee revenues. Since the tiered rate system was put in place only last year, the long-term impact of the switch is still up in the air.
City staff will continue to review the proposed budget until it is presented to the City Council May 15. A public hearing will take place June 5. The budget must be adopted on or before the new fiscal year begins July 1.