Midtown Raleigh News

Raleigh budget draws mixed reviews

City Manager Russell Allen’s budget proposal drew a mix of praise and criticism last week as the public sounded off on the $679 million spending plan.

Arts groups thanked Allen for keeping support for the arts at current levels. But Raleigh’s police and firefighter associations pleaded for better pay and benefits for city employees after three years of painful cuts.

Allen says his budget proposal reflects an improving but still fragile economy. The City Council will debate the recommendation in work sessions each Monday until an agreement is reached. State law requires a budget by July 1.

The proposal includes a 0.91-cent property tax increase approved by voters through transportation and affordable housing bonds on the October ballot. The tax for a home valued at about $188,000, the median value in Raleigh, would rise by a little more than $17 a year.

Here’s a look at key areas of discussion:

Support for the arts: The city would continue to set aside money for the arts at $4.50 per resident. Last year, Allen proposed cutting the figure to $4 per resident, an idea that prompted a successful opposition campaign by arts organizations.

Thirty arts groups applied for grants from the city totaling $2 million. The requests were the most in the program’s 25-year history and exceeded available funding by $150,000.

“The arts are our waterfront, our river, our gathering place and what define Raleigh,” said Sarah Powers, chairwoman of the city’s arts commission. “Your support of the commission is an investment in our economic future.”

Employee pay and benefits: After granting $500 bonuses in lieu of raises last year for city employees, the budget includes merit-based salary increases equivalent to roughly 2 percent for full-time salaried workers.

The change will be applied as a $1,000 increase per employee for staffers with annual job performance ratings of satisfactory or better. Of the 2,705 job evaluations in the last budget year, all but 19 received ratings of satisfactory or better, city figures show.

But employees can’t go beyond the maximum of their pay grades.

So for employees who “max out” before they receive the total $1,000 increase, the difference will be paid as a cash performance bonus. Employees hired after Sept. 1, 2011 are not eligible for the merit pay change.

The cost of the increases will total $2.9 million, Allen said.

City Council members would get a $5,000 raise and be allowed to participate in the city’s health and dental insurance programs. Their salaries haven’t risen in 20 years.

The city should find a way to offer healthier raise amounts, said Councilman Eugene Weeks, who did not give a specific figure for what would be fair.

“Don’t give me a raise before you give the city employees a raise,” Weeks said in an interview.

Keith Wilder, president of the Raleigh Professional Firefighters Association, said the council should boost raises by $2,000.

“I have asked this question for the past four years, and I will ask it again,” Wilder said. “When will it be the employees’ turn to receive something in one hand without having to give it back with the other?”

Chip Roth, the Teamsters representative for Raleigh police officers, said the $1,000 raise is not enough.

Last year, the city introduced a health insurance option that for the first time included a premium for all employees.

“We deserve better,” Roth said. “Our lagging pay means that Raleigh’s police officers and our families are getting priced out of our own city. We are struggling to make ends meet.”

The city must balance the needs of employees against the realities of a tough economy, said Councilman Bonner Gaylord.

“The economy continues to be extremely challenging,” he said. “Lots of people have lost their jobs or not seen raises in many years. It’s great that we’re able to get anything (in terms of raises) into the budget.”

Water and utility needs: Raleigh has wrestled over how to balance conservation with the need to bring in sufficient water revenues to maintain the utility system.

The city’s conservation efforts have been so successful that additional rate increases have been necessary to cover fixed costs. Water and sewer rates each rose by 9 percent last year and are projected to go up by 7 percent this year.

The city must figure out how to raise enough money to replace aging water and sewer pipes in coming decades, said Karen Rindge, director of WakeUP Wake County, an advocacy group that favors controlled growth.

The costs should be shared by developers and customers through fees and rate increases, the group says.

“Billions of dollars will be required, and this obviously cannot come out of the city’s existing budget,” Rindge told council members. “Everyone will have to help pay, but it should be done fairly.”