This week may mark the start of baseball season for sports fans, but for those in Raleigh city government it kicked off budget season with a three-hour pre-budget work session.
City Manager Ruffin Hall will present Councilors with his first Raleigh budget on May 20, but he and city staff wanted to give Councilors a heads up as to what they should expect next month. The budget must be adopted by July 1.
The news was generally mixed. While sales tax revenues are up, the city still only has enough money to repave each road once each century. As Raleigh continued to grow throughout the recession, city jobs were cut leaving staff to take on more work and more responsibilities.
Here are some highlights from Wednesday’s meeting.
City Staffing Levels
Many city departments are looking to add back positions that were either lost or never filled because of the recession. Some positions are completely new. Stormwater is looking to fill eight positions, four of which are new. Public works is looking for 10, five of which would be part of a road resurfacing and rebuilding crew and five that would handle sidewalk repair. Other new positions include a special events manager (to handle all those road races), a social media communications person and an internal auditor.
Solid Waste Services Sustainability
The Solid Waste Services department still needs cash from the general fund in order to operate. As an enterprise fund, this department is considered a separate entity with its own budget and funding mechanisms. The general fund subsidizes enterprise funds when they don’t meet their budgets. In order to be self-sustaining, the department would need to increase rates $1.45 per month for garbage and recycling. For complete cost recovery, rates would need to be increased to about $22 per month. An increase wasn’t proposed in the presentation, but will be up for consideration come May.
More Money Needed for Resurfacing
Some of the most depressing news came via the Public Works department. Public Works needs $12 million each year just to keep up with street maintenance and resurfacing. Currently there is $2 million budgeted, which means the city can resurface every street in Raleigh once every 113 years. They need to pave 5 percent of Raleigh’s streets every year just to keep them at a decent performance level. At current funding levels, less than 1 percent of Raleigh’s streets are resurfaced every year.
Sales Tax and Business License Uncertainty
Sales tax revenue continues to increase, which is an indicator of an improving economy as more people begin to buy more things. The city expects to see an additional $300,000 to $500,000 in sales tax revenue now that Amazon is charging North Carolina residents sales tax.
The big question for the city, however, will be state changes to the privilege license law. If the state changes the law so there is a flat $100 maximum tax, the city will lose between $3.4 and $5 million every year. Total revenue is about $7.9 million. About 50 percent of businesses pay less than $100 already.
Funding for Moore Square Park?
The city has leftover bond capacity to issue $15.3 million in general obligation bonds. City Manager Ruffin Hall suggested using these bonds to fund renovations at Moore Square. Moore Square improvements are included possible parks bond, which was not discussed at Wednesday’s meeting. If Councilors approve using this type of funding, another project could take its place on a list of possible bond-funded projects. This will be discussed more deeply at an upcoming Council work session.