Durham city manager presents budget; 35 jobs cut

“We have been closely watching current economic trends, and it appears that residential real estate and personal property tax growth will remain mostly stagnant, sales tax revenue will decline, and that overall city revenue growth will also decline for the next fiscal year,” Bonfield said in a statement.

Bonfield said budget talks began for the 2009-10 fiscal year with a projected $24 million to $40 million deficit.

With the property tax remaining at 54 cents per $100 valuation, the proposed budget will establish a $750,000 neighborhood revitalization fund; a $500,000 deferred maintenance fund; and will include an average water and sewer rate increase of 9.25 percent, which is less than the 9.5 percent projected earlier this year.

Bonfield said the impact on city employee benefits is significant, but necessary to avoid program cuts and additional layoffs.

“Balancing this year’s budget has been especially challenging and has involved some difficult decisions. It’s never easy when you eliminate jobs, because you ultimately are affecting not only those employees, but their families as well,” Bonfield said.

The draft budget calls for eliminating 113 city jobs, but 78 of those positions are currently vacant.

In addition, pay-for-performance increases will not be awarded. However, police officers and firefighters will receive 3 percent anniversary increases, totaling $1.8 million.

Other employee benefit reductions include decreased contributions to 401(k) plans and increased health care insurance premiums.

Public hearings on the budget begin June 1. Final approval is scheduled for June 15.