News
June 16, 2009
Raleigh Budget Cuts Spending; Maintains Essential Services
The Raleigh City Council has adopted a net operating and capital budget for Fiscal Year 2009-10 (FY 2010) of $697,595,799. The budget, approved by a vote of 7 to 1 with Philip Isley voting in opposition, contains no property tax increase and eliminates 85 positions. All of the eliminated positions are vacant. The budget covers the City’s expenses for July 1, 2009 through June 30, 2010.
The $385,239,344 General Fund operating budget is $1,975,516 less than the current fiscal year’s operating budget of $387,214,860. The budget does not reduce public safety funding significantly or require staff lay-offs. It does maintain the City’s high standards of fiscal planning, management, control and reserves expected from a AAA quality credit. The proposal also maintains Raleigh’s property tax rate of 37.35 cents per $100 of value and the lowest combined municipal costs in the Triangle and among the lowest in the state.
Twenty-seven full-time vacant positions were reduced from the Parks and Recreation Department staff. The newly adopted budget reduces service hours and maintenance for community centers, parks, public pools, special events and roadsides and greenways.
The economic downturn has translated into a significant reduction in workload in the Inspections Department. The budget reflects this with the reduction of 15 vacant positions and the temporary redeployment of seven inspectors to the Fire Department where they will generate additional revenue and provide required fire safety inspections.
Eleven positions were eliminated in the Public Works Department. Funding for the Accessible Raleigh Transit Tier I program was not reduced, as had been proposed. The budget does delay the implementation of the Transit Plan to January 2010 and an asphalt and pothole patching crew were eliminated. This elimination will delay response time to repair utility cuts and increase the response time to patch potholes from 24 hours to 36 to 48 hours.
The following are some of the most significant cost-saving measures in the budget:
- Elimination of a 1.5 percent range adjustment for employees along with a reduction of the merit pay program that allows the maximum increase to be decreased by 1 percent;
- Increase of 7 percent for employees’ dependent insurance coverage;
- Decrease of $1.85 million to the general fund’s allocation to the debt model;
- Transitioning to a fuel-consumption model for budgeting fuel;
- Deferring the purchase of 47 replacement vehicles;
- Restricting travel and training; and,
- Funding only those professional and contractual services that cannot be deferred to another year.
Revenue Components
The significant revenue components affecting the FY2010 budget are:
- A 2 percent increase in property tax revenues due to growth;
- The second portion of the retail water and sewer rate increase approved in April will become effective Dec. 1. Concurrent with this rate increase, the Public Utilities Enterprise Operation will transition all customers to monthly billing and residential customers in the Raleigh and Garner service areas to a tiered rate billing structure to promote water conservation ;
- A 3 percent decrease in sales tax revenue;
- Declines in inspection fee revenues of 27 percent and a 59 percent decline in facility fees; and,
- A 10 percent increase in intergovernmental revenues. These are franchise fees from utilities and telecommunications companies that have increased in part due to updated allocations to the City as a result of audits.
Capital Improvement Program
The adopted budget includes the Capital Improvement Program (CIP) that totals $311,676,446 for FY 2010 and $1.2 billion for the coming five budget years. The FY 2010 CIP represents an 18 percent decrease from the FY 2009 CIP.
Factors limiting revenues to support the FY 2010 CIP include:
- A 35 percent reduction in Powell Bill funding;
- A 50 percent reduction in interest income;
- A 50 percent reduction in general fund pay-go capital;
- A 38 percent reduction in Public Utilities pay-go capital; and,
- A projected 57 percent decline in facility fee revenues.
The CIP includes a $136.8 million transportation bond referendum for the fall of 2010.
Total appropriations for Phase I (FY 2010 through 2014) of the CIP are at the following levels for the six major program areas:
- Transportation $192.4 million;
- Public Utilities $374.9 million;
- Parks $85.8 million;
- Stormwater Utility $36.5 million;
And Neuse Basin Environmental Program
- Housing $15.0 million; and,
- General Public Improvements $496.7 million.
TRANSPORTATION
Funding of $192.4 million is set for transportation infrastructure improvements, including the phased completion of projects funded by the 2005 Street Bonds and a proposed $136.8 million bond referendum to be sought in the fall of 2010 to fund the remainder of the 2005 Street Bond projects along with new projects in FY 2011 and beyond.
The transportation categories of funding are 19 major street-widening and road improvement projects; street improvements such as street resurfacing and repairs to City-owned bridges; funds for replacement buses and feeder vans for the City’s transit system, Capital Area Transit, and funding for necessary assessment of the condition of City-owned parking decks and subsequent repairs. This program is funded directly from the City’s Parking Fund.
PUBLIC UTILITIES
The utilities program continues to execute an extensive number of investment projects, as well as initiatives to improve water and wastewater operations throughout the Raleigh service area which now includes providing service and capital investment to infrastructure located within the municipalities of Garner, Knightdale, Wake Forest, Rolesville, Wendell and Zebulon.
Environmental projects represented in the program include an appropriation of $1.0 million to the Falls Lake Initiative in FY 2010. This is a water quality preservation program.
PARKS
Phase I of the CIP earmarks $1.6 million for parks property acquisition, $16.4 million for development projects and $67.7 million for phased expenditures from the 2007 Parks Bonds. The 39 percent decrease in facility fee revenue and other pay-go revenue and other pay-go capital has resulted in limited land acquisition for future parks and greenway projects, reduced greenway development and delayed repairs and improvements to parks and other infrastructure.
STORMWATER UTILITY AND NEUSE BASIN ENVIRONMENTAL PROGRAM
The FY 2009 capital budget appropriated an infusion of $20.2 million for stormwater projects funded by revenue bonds. This year’s CIP returns to a program of $36.5 million in Phase I financed through operating transfers, also known as pay-go funding.
GENERAL PUBLIC IMPROVEMENTS
All other capital facility and maintenance needs fall under the category of General Public Improvements (GPI). Included in this program is the construction of fire stations and other public safety initiatives that support police and emergency communications operations. A total of $491.9 million in GPI and $4.8 million in economic development initiatives is proposed.
Major project categories within the GPI are:
- Bonded Funded Facilities and Major Renovation Construction: The Clarence E. Lightner Public Safety Center ($205.3 million) and the continued development of the Remote Operations Facilities concept ($240.1 million) are funded through a multi-year debt model strategy that includes 1.68 cents of the property tax rate increased adopted by Council in FY 2009, along with subsequent year increases as projected in the debt service model. Three new fire stations, expansion of the fire training facility, police district stations, and a police training facility are also identified needs in Phase I of the CIP. The total construction cost of these projects is estimated at $23.9 million in Phase I, with an additional $10.9 million needed in Phase II of the CIP. As there is no identified funding source for these additional projects, Mr. Allen is recommending bond funding;
- Facilities and Major Renovations Planning: The projects in this category ($4.0 million) focus on the design, planning and land acquisition costs associated with future projects, as well as the completion of Fire Station 29;
- Facility Improvements: These projects address the major infrastructure repairs and maintenance of City-owned buildings and facilities ($6.4 million);
- Technology, Equipment, Other: This funds technology ($2.8 million) target areas of the City, with particular emphasis in the downtown core, to accommodate and promote economic growth.
The complete budget can be seen on the City of Raleigh website. Bound copies of the budget may be reviewed in the City Clerk’s Office. For more information, contact the City’s Budget Office at 996-3840.
Prepared by:
Jayne Kirkpatrick
Director
Public Affairs Department
For More Information Contact:
Joyce Munro
Acting Budget Manager
Administrative Services Department
222 West Hargett Street, Room 302
Raleigh, NC 27601
919-996-4273
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