At tonight's regular City Council meeting, Durham City Manager Tom Bonfield proposed a $344 million budget for Fiscal Year 2009-10--a decrease of roughly $11 million, or 3.1 percent, from last year's budget. You can view his Power Point presentation, and accompanying letter, at the City's new budget Web site.
The most controversial aspect of Bonfield's plan is the elimination of 113 jobs, including 35 current employees (the rest are unfilled positions). That represents a 4.7 percent cut to the City's workforce of 2,400, at a total savings of roughly $6.6 million.
In addition to job cuts, Bonfield proposed freezing most pay raises, and reducing benefits such as 401(k) matches and healthcare coverage for all employees.
“Clearly the biggest impact of the proposed budget will be on our employees," Bonfield said. "Unfortunately, because we are such a personnel-intensive organization, it is impossible to reach a balanced budget proposal without affecting employees."
As Bonfield read off the proposed layoff numbers, several dozen protesters representing Durham City employees--at least 35--filed silently out of their seats, holding up neon-colored signs that read, "Use the rainy day fund."
Apparently expecting that suggestion, Bonfield responded as the last of the protesters left the room:
"While some have suggested we avoid these decisions by tapping into reserve funds, the reality is that funding ongoing expenditures with one-time revenues is bad fiscal policy. And, quite frankly, no one knows how long this economic downturn will last, or if it will even get worse. Thus, we must not postpone making these difficult decisions with the hopes that things will get better."
One of Bonfield's key objectives for the FY09-10 budget was to maintain a reserve fund of at least 11 percent of the City's budget general fund. He estimated that the City would have at least that amount on hand at the start of the fiscal year. Another major objective was the establishment of a dedicated neighborhood economic development fund, which he budgeted for $750,000, and a deferred maintenance fund, which he budgeted for $500,000. Other objectives, such as a dedicated street resurfacing fund and and dedicated public transportation fund, were not incorporated, due to cost restraints. (Bolstered by $3.3 million in federal stimulus grants, Durham's public transportation services will remain undistibured, though no new routes will be added.)
The City is expecting a $24 to 40 million shortfall, due to a declining sales tax revenue-- the result of the national recession.
The "only bright spot," Bonfield said of this year's revenues, was an estimated $700,000 increease in property taxes, due to new construction, annexation and past due collections.
A public hearing on the proposed budget will be held at City Hall on June 1, at 7 p.m. City Council is scheduled to make a final budget decision at their June 15 meeting.