Salaries, gas drive budget for Durham

Concern that pay for Durham city employees lags behind similar cities looms large for the tax rate

Staff WriterMay 31, 2008 

  • Mayor Bill Bell wants a tax rate of 54 cents per $100 property valuation, 2 cents less than City Manager Patrick Baker recommends. The city will need to find $3.6 million in its general fund this year to pay increased salaries for city employees (that will be added to the $1.5 million already in Baker's budget).

    One penny on the tax rate generates $2.17 million.

    To get the tax rate down to Bell's desired level and pay for raises, Baker will have to cut about $8 million from his proposed $356 million budget.

    He will deliver a revised budget, with fresh cuts, to the council on June 9.

— Durham employee salaries lag behind those of their peers elsewhere, and it will cost millions to catch up, city leaders learned Friday.

The news will have a dramatic impact on next year's budget, forcing City Manager Patrick Baker to cut several proposed new programs, including a comprehensive curbside waste collection program.

Salary ranges in Durham were between 5 percent and 22 percent lower than the market average, according to a study presented Friday by the Dallas-based Waters Consulting Group Inc. The company's contract with the city was not to exceed $175,000.

Durham salaries were compared with neighbors such as Raleigh and Chapel Hill as well as cities similar in size and demography such as Fayetteville; Norfolk, Va.; and Knoxville, Tenn.

The total annual cost to bring salary ranges in line is $9.5 million, some of which would be paid for by water and sewer fees. Most, however, would come from the general fund.

Council members are leaning toward paying $6 million of that next year, with $5.1 million coming from the general fund.

The rest would be phased in starting in the 2009-10 fiscal year.

"The message today is we have to pay the IOUs that have piled up," council member Mike Woodard said.

Though the salary range adjustments would be applied to all the city's 2,400 positions (about 300 of which are vacant), City Council members were confronted by a sea of uniformed police and firefighters Friday.

More than 100 showed up at City Hall to pressure the council to action.

Police Sgt. David Addison, president of the Triangle Police Benevolent Association, and Bill Towner, vice president of the Durham Professional Firefighters Association, both said they were pleased with Friday's discussion but want to see follow-through.

"What happened here today is very encouraging," Towner said. "But it's nothing that we haven't been telling City Council the last four or five years."

Both men can accept phasing in the new salary ranges over two years so long as the council commits to implementing the new system fully.

"We're pulling from the same pool of employees as Chapel Hill, Raleigh and Greensboro," Addison said. "If we can't compete with them, then we're not going to get the same qualified people as they are."

Council members voiced strong support for increasing salaries across the board but paid particular attention to the public safety personnel who made up their immediate audience.

"We've got to bite the bullet; we're behind," council member Eugene Brown said. "It costs us money when people leave. It's either pay now or pay later."

Baker will have to spend next week cutting items from the budget to make room, a task complicated by Mayor Bill Bell's call for a smaller tax increase than what Baker has proposed.

Bell would like to see the proposed tax rate drop from 56 cents per $100 property valuation to 54 cents.

With each penny on the tax rate yielding $2.17 million, that means cutting $4.34 million from Baker's proposed $356 million budget.

One proposed new program, a $3.2 million comprehensive waste pickup, appears to be headed first to the chopping block.

"It's clear that some priorities just aren't going to be met in favor of the top priorities," Baker said.

"Gas costs and employee compensation are the drivers of this budget. How much can we afford to pay? How much can we ask taxpayers to pay in these difficult economic times?"

matt.dees@newsobserver.com or (919) 956-2433

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