*Update to this article: The fiscal year 2025 budget was adopted June 10, 2024. Full detail, including the full adopted budget document, is coming soon.
For fiscal year 2025, Raleigh City Manager Marchell Adams-David presented a $1.43B budget to Council, an 11.8 percent increase over FY2024. The plan puts Strategic Plan initiatives and objectives into action, delivers high-quality services that pursue the City’s Vision and Mission, and accounts for economic pressures including inflation, supply chain issues, and interest rates.
The general fund reflects a 13.1 percent increase to $732.2M. It invests in the City’s workforce, expands and pilots programs for vulnerable populations, and addresses pressures on service delivery caused by growth and inflation. The budget includes market adjustments and merit raises for all employees, with additional investment in public safety and maintenance workers. (Details below)
Other prominent items this year are an Alternative Response Program, affordable housing, and Dix Park operational costs. Both transit and transportation received significant increases in operational budgets to offset lost revenue and increasing cost of service. This budget plans for the future by intentionally setting aside dollars to fund future maintenance costs, capital improvements, and staff salaries.
“The investments proposed are strategically designed to maintain the City’s competitive edge amongst our peer communities,” said Adams-David. “This year’s proposed budget invests in Raleigh’s future; a future that is bright and promises endless possibilities. A future that champions creative solutions to the most complex issues. A future that accepts each challenge as an opportunity to develop innovative approaches that enhance operations, minimizes disruption, and elevates the customer experience.”
Revenue
The additional programs and investments will be funded primarily by additional property tax collections. The Wake County property revaluation this year pushed average home values in Raleigh up 52 percent and commercial properties 43 percent. The tax rate will go from 43.3 cents per $100 of property value to 35.5 cents. The revenue neutral rate is 31.7 cents.
The median home after revaluation is $391,705, with a tax bill of $1,390. Prior to revaluation and with the higher rate, the median home of $257,730 paid $1,115 in taxes. Because property values changed differently across the City, every property owner’s calculation will be different.
Other revenues include sales tax, which is projected to have modest 6.6% growth this year after rapid growth during the previous three years. The budget anticipates modest growth in parks user fees and development fees.
Workforce, Policy, and Service Investments
The budget follows the financial roadmap laid out over the last year with City Council, responding to community concerns and Council priorities. The largest investments are in City staff, which will receive market adjustments and merit-based increases this year:
Market adjustments
- Five percent for public safety workers, including sworn police officers, firefighters, and 911 call takers
- Six percent for maintenance and operations specialists and nine percent for those crew supervisors. These positions are largely in Solid Waste Services, Transportation, Water, and Parks, Recreation and Cultural Resources
- Two percent for all other employees
Merit adjustments
- Five percent for the above public safety workers
- 3.5 percent merit pool for broadband workers (Individual raises range from 1 to 6 percent)
- One percent for part-time and new employees
The budget matches the Alternative Response Program outlined at the April 16 council meeting. Funding for call diversion is included in the Emergency Communications Department; three positions are allocated to Housing and Neighborhoods for peer support and case management; and $800,000 restores funding in the police budget for co-response by social workers. The City continues to work with Wake County and other partners on a community response team.
One penny of the tax rate is dedicated to affordable housing programs. This year, that amount will grow by $3.5 million. Investments will increase support for affordable housing for people with low incomes and strengthen the system that supports people experiencing homelessness. An additional $500,000 will be available to assist those in danger of losing their homes. Planned spending incorporates the Unsheltered Pilot Program discussed May 7 at Council. A range of community and partner organization investments round out the spending.
Other items follow the financial roadmap, developed through our public engagement process in the fall and City Council actions and conversations over the last year. The roadmap guides budget development by naming high-dollar items that reflect community and Council priorities. Cost of business, inflation, supply chain issues and other economic factors that drive up costs to deliver high-quality service are factored in as well. Items of note include:
Dix Park
The City’s long-term vision for Dix Park is moving closer to reality with the opening of Gipson Play Plaza this year. The City also takes over maintenance of three buildings from the state. This brings eight new bond-funded positions to Parks, Recreation and Cultural Resources (PRCR) and four General Fund positions to Engineering Services. This year’s capital improvement plan earmarks another $8.66 million for Dix.
GoRaleigh/Transit
Effective mobility options are critical to the City’s success, and transit remains a top area of interest for the Council and community. During the pandemic, GoRaleigh’s budget was cut and fares were suspended. The federal funds that replaced those dollars have ended, and GoRaleigh will receive $8.2 million more in General Fund dollars to address the gap. Fares will also resume July 1.
Transportation
The City’s Department of Transportation provides citywide leaf collection. The costs to dispose of the leaves collected have increased by $900,000. Transportation also pays the electricity bill for streetlights, stop lights, and other lighting throughout the City. A $805,000 (12 percent) increase to the department’s budget is allocated to cover increased electricity costs.
Fire Equipment
This budget creates a 10-year fire apparatus replacement schedule, which will replace 71 percent of the fleet over the next 10 years. This year, RFD will replace protective and communications equipment and begin the purchase process for a ladder truck.
Downtown Parks
Continuing the City’s efforts to increase safety, cleanliness, and foot traffic at downtown parks, this budget adds 3.125 positions for Parks. The properties include Moore Square, Latta University Historic Park, Nash Square, and other downtown public spaces managed by PRCR. The positions are funded by the property tax capacity earmarked for operating needs of the 2022 Park Bond.
Human Resources
Recruiting strong candidates and retain high-performing employees continues to be a priority for the City. Following an external review conducted in FY24, the budget recommends three new full-time positions and the conversion of two part-time positions to full-time to support a strong workforce. Additional operating funds are allocated to support recruitment strategies, employee relations, workplace safety and process improvements.
Overall, Public Safety accounts for 33 percent of the budget at $241M, a $7.6M increase over FY2024. Most of that increase, 71 percent, is personnel. Infrastructure and services accounts for 16 percent, with 10 percent for leisure services. Then 20 percent each are allocated to general government and debt service. This year’s capital improvement plan adds the equivalent of a penny on the tax rate for a pay-as-you-go approach to maintenance and capital costs. That’s part of the $499.7M capital budget for FY25, which itself is part of a $2.15B five-year plan.
The City’s enterprise funds are designed to recover all costs without any reliance on subsidies from the general fund. To mitigate the impact of current market pressures, these funds are proposing moderate rate increases:
- Raleigh Water has a tiered increase with an average residential increase of $1.58/month.
- Stormwater will raise fees by $0.29/month to support staffing and capital projects that protect creeks and streams from runoff.
- Solid Waste Services has proposed an increase of $1.70/month to meet operational cost increases and continue its transition to a self-supporting enterprise fund.
This year’s budget process includes a participatory budget process, inviting residents to vote for projects within their district. The winning projects for all districts were sidewalks. In addition to the $200,000 per district for sidewalk construction or maintenance, this budget responds to the high level of community support by adding another $1M to fund these projects. In addition, Transportation has received six positions for sidewalk maintenance.
A public hearing will be held on the budget at 7 p.m. on June 4. Signup to speak closes at 3 p.m. on May 31. City Council will hold a work session each Monday in June beginning at 4 p.m. on June 3. These weekly work sessions will continue until the City Council adopts the annual operating budget and five-year capital program. The earliest potential adoption date is June 10.
For more information, including the Manager’s Message, full FY25 Proposed Budget, FY25 Proposed Budget Presentation, and live dashboard, view Budget and Management Services.