Guided by City Council budget guidelines, citizen priorities, and meeting community needs, the City of Durham Administration is on track to present a preliminary balanced budget for Council consideration on May 18.

According to City Manager Tom Bonfield, the proposed budget maintains or even increases the City's commitment to priority areas. "This budget reflects ‘community priorities' which was the guiding principle for developing this year's budget," Bonfield said. "Fortunately, even with this year's tough economy, the Administration was able to meet those priorities, including public safety, providing quality core services, neighborhood revitalization, capital project delivery, and youth programs."

Much of the budget impact involved eliminating 113 positions, with 35 positions actually filled, Bonfield said. Efforts are under way to place some of the affected employees in other City positions as appropriate. While holding the tax rate at $0.54, only minimal increases in some fees are proposed. Here are some highlights of the proposed 2010 budget:

Revenues and Fund Balance

· Overall decrease in revenues, which include property taxes, sales taxes, state revenue sharing, and fees.

· Fund Balance, the City's rainy day fund, will not be used to balance the budget. It will be maintained at 11 percent, but may increase using savings from FY2009.

Debt

· No new debt will be issued.

· The debt ratio will not exceed 15 percent (as per budget guidelines).

Operating Expenditures (as compared to last year's budget)

· Overall expenditures are decreased.

· Personnel expenditures are decreased.

· Operating expenditures are decreased.

Operations

· Meeting existing needs:

o Citizens should be minimally affected by some service adjustments made due to low use, although no programs are slated for elimination.

o Fire Station 15 will be staffed without additional cost.

o Non-City Agency grants are reduced by $310,000 with no new agencies funded.

· Other funds (Durham Bulls Athletic Park, Convention Center, Parking, Downtown, Transit, and Cemetery) will not incur new costs, and will only be funded at a level to cover required costs, including debt and operating costs.

· What's New:

A Neighborhood Economic Development Fund and a Deferred Maintenance Fund will be created.
Additional funding is included for Walltown, Holton Career and Resource Center, and the Teen Center.
Water use rate increase will not exceed 9.4 percent, with no increase for the Tier 1 users, or residents who consume at the lowest level, which is approximately 400 cubic feet of water every two months.
Grants will be used to fund police officers for the Central Warrant Office and Code Red.
American Recovery and Reinvestment Act (Economic Stimulus) funding will be used to assist with some capital projects and Durham Area Transit Authority (DATA) buses.

Employee Pay and Benefits

· No merit increases for general employees, but the annual adjustments to the Police and Fire Annual Pay plans are funded.

· Modest increases to health plan contribution to maintain high quality health care services.

· Employee 401(k) contributions by the City will be reduced from 5 percent to 3 percent for the year.

· The City's longevity plan will be reduced depending on years of service, and will eventually be phased out.

Following Bonfield's presentation to Council on May 18 at 7 p.m., during the regularly scheduled Council meeting, budget hearings will take place starting Tuesday, May 26 through Thursday, May 28. A public hearing is scheduled on Monday, June 1 at 7 p.m. in Council Chambers.

For more information about the budget review and adoption schedule, or to view the budget guidelines, visit the City's budget Web page at www.durhamnc.gov/citybudget.