New County Manager Wendell Davis proposed a $552 million budget for 2014-15 on Tuesday, with a 3.5 percent tax-rate increase and an emphasis, Davis said, on “human capital.”
The proposed spending plan is 4.9 percent more than the current year’s budget of $526.4 million.
More than a third of the property-tax-rate increase is for raising employee pay, following a compensation study that found Durham County pay ranges average 4.6 percent below those of nine public-sector peers. Sixty-eight percent of county employees earn less than $50,000 a year.
“Good employees, you have to work to retain them,” Davis said in a news media briefing before presenting his budget proposals to the county commissioners.
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The increases would affect about 1,200 county employees, according to Davis and senior budget analyst Keith Lane, most of them in lower-paying jobs.
Davis, who became county manager in April, has proposed an increase of 2.73 cents per $100 of property valuation, raising the county tax rate to 80.17 cents. For the owner of a $150,000 house and lot, the increase would mean an extra $40.95 on next year’s tax bill.
For city residents, the county increase plus the city’s proposed increase of 1.29 cents per $100 valuation would mean a total increase on a $150,000 house of $60.30.
Besides employee pay, the county increase would go toward “operational needs” and servicing debt incurred for new libraries, schools, the Museum of Life and Science, the human services building and new courthouse.
Debt service – paying back borrowed money – accounts for 0.86 cent of the total increase, and follows last year’s 3 percent rate increase for debt service. However, it is less than the 2 percent rise that former County Manager Mike Ruffin had predicted would be needed for 2014-15.
The reason, Davis said, is the county’s AAA credit rating. At the most recent sale of bonds, Durham County was able to borrow $50 million at an interest rate of about 2.91 percent – a saving, Davis said, of about $800,000 each year over the bonds’ 30-year term.
“That was the cheapest debt that had been sold in the state and probably the cheapest ... in the history of the county,” he said.
Davis recommended adding 29.28 “full-time equivalent” positions to the county payroll, including 16 in emergency medical services to help speed response time. His budget eliminates 5.53 full-time equivalents, for a net increase in salaries and benefits of $937,714 annually.
The budget includes just under $119 million for Durham Public Schools, an increase of $629,835 totally covered by higher-than-projected revenue from the quarter-cent sales tax voters approved in 2011.
Durham County’s per-pupil appropriation is $3,069 – $690 higher than New Hanover County, which has the state’s second-highest per-pupil spending among the seven largest systems.