Agenda with attachments available at https://pub-raleighnc.escribemeetings.com/Meeting.aspx?Id=c496d370-aee6-41a4-bae1-b778160eceb7&Agenda=Agenda&lang=English&Item=5728&Tab=attachments
Video available at https://www.youtube.com/watch?v=7yEK7ZynFOM
HIGHLIGHTS
- Currently showing a shortfall in revenues, yet continuing to plan for expensive projects
- Concerned about impact of potential NC General Assembly actions on property taxes
- Concerned about significant benefits-related long-term liabilities
- Budget work sessions start 2/16; public hearing will be 6/2
- City now will have a steady state of $200M every four years for bonds with no tax increases
- Proposing $103M Transportation Bond in 2026
- Proposing $101.5M Housing bond or about $20M/year for four years.
- Proposing new Parking Study to come up with ideas to deal with projected shortfalls
BUDGET AND FINANCIAL OUTLOOK
- Currently showing starting off with an $18.3M shortfall; looking at potential reallocations and reductions
- But need an additional $24.5 to $38.5M to cover
- Targeted staffing study ($5-10M)
- Parking subsidies ($3M)
- Salary increases ($2.6 – 6.3M)
- Fire Master Plan ($5-10M)
- Dix Park ($2M)
- IT ($2.5M)
- Unknown ($5M)
- Property taxes and sales taxes contribute the majority of City revenues
- NC General Assembly looking at opportunities to reduce burden of property taxes, so want to understand what cities and counties are spending their money on
- May lose additional revenues if additional property tax exemptions are granted for Affordable Housing, Brownfields, and Commercial properties
- 2026 Bonds must be voted on by July meeting
- City now will have a steady state of $200M every four years for bonds with no tax increases
- 22% of City’s Long-term Liabilities are benefits-related and have increased 58% over the last five years. Some are required by NC law. Looking at various options to control, including closing retiree healthcare benefits for new employees as many other municipalities have down. That would save $6.6M over 5 years, $31M over 10 years, and $79M over 15 years. Mayor Cowell advocated for looking at other benefit options.
- Reviewed internal spending controls in a response to Cary’s situation
- Will hold budget work sessions on 2/16, 3/9, and 4/6. Budget will be presented on 5/19. First public hearing will be held 6/2. Additional work sessions scheduled for 6/1, 6/8, 6/15, 6/22, and 6/29. Budget could be adopted any time between 6/15 and 6/29.
TRANSPORTATION BONDS
- Councilor Silver emphasized that time is money, so need to understand that enhanced citizen engagement leads to higher costs.
- Proposing $103M Transportation Bond in 2026 to cover $48M in outstanding commitments, $40M for adopted plans, and $15M for programs.
HOUSING BONDS
- Proposing $101.5M Housing bond or about $20M/year for four years.
- $57.6M or $14.4M/year for Housing development and preservation which would result in 160-510 units annually
- $10.4M or $2.6M/year for Homebuyer assistance, resulting in 40-50 units/year
- $12M or $3M/year for Homelessness, resulting in helping 125+ households
- $21.5M one-time capitalization for Mixed Income development, resulting in ~200 units every 3-5 years
- The February 10 work session will focus on housing
PARKING
- $2.7 — $3.9M needed
- Want to sell some decks, but need to consider timing and any additional investments
- Need $20M for status quo and taking in only $16M
- Looking at rate change options
- Proposing new parking study since much has changed since 2017 study