City employees will now have to pay health insurance premiums, but they will also get a $500 bonus under the Raleigh budget adopted Tuesday.
The Raleigh City Council voted 6-2 to adopt its $660.8 million net operating budget for the 2012 fiscal year beginning July 1. Councilors John Odem and Bonner Gaylord voted against the spending plan.
The new budget is a 6.6 percent increase from this year’s plan. The budget does not increase property taxes, but the average customer’s sewer administration fees will go up by $3.83. Councilors also agreed to reinstate arts funding that had been dropped from the original proposal.
Although city employees will receive a bonus, they will feel a big pinch in other areas. The budget reduces their supplemental retirement fund, eliminates merit pay and awards for service and changes their health insurance plans, now requiring a monthly premium.
Those new employee contributions add up to $1.7 million, only part of the $3.7 million increase in the city’s health care costs.
The adopted budget also eliminates 35 vacant positions.
There was some discussion among the councilors on how to ease employee pain. Councilwoman Nancy McFarland suggested depositing the money into employees’ spending accounts to help pay for insurance premiums.
Councilor Mary-Ann Baldwin preferred the bonus idea.
“I was leaning toward a raise, but I think right now because of the uncertainty with the items and the fact that we can’t get consensus on increasing the [solid waste] fee, my preference would be for the $500, but we do it in six months and see where we are,” she said.
The one-time employee bonus will be paid Jan. 1 using $1.5 million from the capital improvement project economic reserve fund. City Manager Russell Allen will give his recommendations as to which specific capital projects the money will come from. That money is expected to be replenished after the city audit in November.
Capital improvement economic reserves will also be used to fund the restored arts and human services programs. Arts funding will continue to stay at $4.50 per capita for a total of about $202,000.
The council agreed to decrease the proposed funding for the Boys & Girls Club on Raleigh Boulevard from $50,000 to $25,000 a year for five years, which matches Wake County’s contribution.
Councilman Russ Stephenson requested the addition of $50,000 to fund a capital project for the Downtown Housing Improvement Corp that will create a central location for a job training program at Carleton Place. The program would be administered by the YWCA.
Councilman Thomas Crowder asked that $10,000 be allocated for city cemetery maintenance.
About $450,000 will be taken from the reserves of the wayfinding and directional signage budgets to pay for all of the programs.
Gaylord said that’s why he voted against the budget.
“I agree we should fund arts and human services and restore those items, but I don’t feel that they should come out of downtown directional signage,” he said.
On the revenue side, the city expects a 0.7 percent increase in property tax revenues and a 1.5 percent increase in sales tax revenues. With the opening of the Buffaloe Road Aquatics Center and Pullen Amusement Center, the city expects to see an increase in park revenue.
