City Council Adopts FY2023 Operation and Capital Improvement Budget

Raleigh City Council Adopts Budget 

The Raleigh City Council adopted the budget for Fiscal Year FY23 and the proposed Five-year Capital Improvement Program for FY23-FY27 at today’s City Council meeting. The budget continues the City’s commitment to fiscal stewardship, operational efficiency, strategic investments, and effective change management.

The net operating and capital budget for FY23 is $1.14 billion, which includes a General Fund total operating budget of $590.4 million. The General Fund budget represents an 8.5 percent increase over FY22. 

The FY23 Capital Improvement Program totals $554 million, with the total for five years (FY22-FY26) being $1.95 billion.

The FY23 adopted budget includes a two-cent property tax increase, raising the rate of 37.30 cents per $100 valuation to 39.30 cents per $100 valuation. The additional revenue will support employee compensation and much-needed operating enhancements that have been delayed or deferred during the pandemic.  

The adopted budget includes $0.25 increase per month in Solid Waste Services to support increase costs associated with employee compensation, fuel, vehicle repair and maintenance, and landfill fees. The adopted budget also includes a Raleigh Water 1.5 percent increase in the monthly base and volumetric water and sewer charges. Finally, the adopted budget includes a $0.18 increase per Single-Family Equivalent Unit for stormwater. The rate increase will cover additional staff and helps to accelerate the backlog of CIP projects.

FY23 begins July 1, 2022 and ends on June 30, 2023.

Budget Highlights

The adopted budget recognizes the importance of investing in our greatest asset, our employees. The FY23 budget includes adjustments to maintain a competitive compensation and benefits package, including:

• This budget includes the full year costs of a two-percent Cost of Living Adjustment (COLA) for all full-time employees in the department ($5.3 million). The COLA was approved by City Council in April;
• This budget moves Police and Fire pay range minimums to the average of Wake County municipalities plus six percent, with pay range maximums increasing accordingly. Emergency Communications’ pay ranges are also adjusted based on market conditions, increasing two ranges in the General Pay Structure ($1.9 million); 
• The budget includes pay range adjustments for critical staff in the Emergency Communications Center. These include $142,400 in pay range adjustments for 35 employees. These pay and adjustments are included in a total investment of $387,000 for employees in the department; 
• The budget moves the Public Safety Structure merit increases to five percent for those below the midpoint and three percent for those at the midpoint and higher; an increase from the FY22 budget which funded the merits at two and four percent ($3.4 million);
• The budget moves the General Pay Structure merit increases to five percent for those below the midpoint and three percent for those at the midpoint and higher; an increase from the FY22 budget which funded the merits at two and four percent. It also continues to fund the Broadband Pay Structure merits for eligible employees at one to five percent ($5.4 million);
• The budget investments in our Solid Waste Services Department which includes $94,000 in pay adjustments for 59 employees and $674,000 in pay enhancements for employees in the department;
• The budget funds an increase in the Temporary Pay plan from a minimum of $8.25 to $11 an hour for temporary employees to ensure the City is competitive in the market and continues to provide the critical services our community expects. Included in this is raising our lifeguard pay to $13 hour to help with recruitment in a very competitive field ($3.2 million); and,
• The budget includes a new Permanent Part-Time classification within the City to increase the stability of service delivery, improve recruitment of key positions and maintain programming and services ($1.9 million). 

The Adopted Budget for FY23 focuses on reinforces our commitment to fiscal stewardship, operational efficiency, strategic investments, and effective change management through: 

• Funding for a contractual position in Communications to support the ongoing maintenance and continuous improvement of the website and other critical communication channels;
• Funding for a Mobile Community Engagement bus that will allow staff to meet our community where they are available and continuing to advance City Council’s commitment to reaching those that are traditionally underserved and underrepresented in our city;
• Consulting services for the Department of Equity and Inclusion that will provide capacity building, training and facilitation development, and additional support to address inclusion and bias at the department levels throughout the organization;
• Funding for a new position in Housing and Neighborhoods that will continue to support the implementation of the 2020 voter approved Affordable Housing Bond;
• Funding for the addition of one staff psychologist for the Raleigh Fire Department; and, 
• Capital investments in affordable housing, street resurfacing, and parks maintenance. Each of these areas has $7.8 million dedicated. This represents a $117 million commitment to these three areas during the next five years.

Through the budget development process, Council added the following items to the FY23 Budget: 

• VMT Program Addition -Council approved the implementation of a Vehicle Miles Traveled (VMT) analysis screening tool and methodology.  This is a two-phase process in which Raleigh Department of Transportation will work with a consultant to develop a VMT analysis screening tool and methodology for VMT-based studies.  The second phase will include implementing a VMT-based analysis into City code and processes. Because this is a multi-year strategy, $150,000 in one-time funds has been added to the Capital Improvement Program in the Street Improvement Fund for advanced planning programming;   
• MSD Tax Rate Change - At the May 17 Council meeting, a presentation was provided on tax rate increases proposed by the Downtown and Hillsborough Street Municipal Service Districts (MSD) service providers. Council requested at that meeting that the new rates be changed in the FY23 Adopted Budget.  The Downtown MSD tax rate increases from 0.044 cents per $100 of valuation to 0.0786 per $100 of valuation and results in an additional $1,169,000 in revenue.  Downtown Raleigh Alliance will receive this additional revenue.  (A total of $295,000 in MSD revenue is retained by the City to cover a portion of the City’s downtown clean team.) The Hillsborough Street MSD tax rate increases from 0.0965 cents per $100 of valuation to 0.15 per $100 of valuation and results in an additional $367,000.  Hillsborough Street Community Service Corporation will receive this additional revenue;  
• Council Pay - Council approved a motion to adjust Council pay in accordance with the study group recommendations, to be implemented in December after the new City Council takes office. The recommendations were reviewed and approved at the June 6 Budget Work Session.

Council pay will be adjusted in accordance with the recommendations as  follows: