Durham city manager Tom Bonfield’s proposed budget for the 2020-21 fiscal year does not contain a property tax increase, but it does include a $5 million COVID-19 response and recovery fund, he told the city council on Monday.

The proposed budget also draws $7.2 million from the city’s reserves to cover revenue losses related to COVID-19. 

Bonfield said that “the challenge of finding an additional $7 million to provide compensation adjustments for employees could not be overcome.” As a result, his proposed budget contains no pay increases.

Bonfield’s recommended budget is $504.3 million, up from a $477.8 million budget the previous fiscal year. 

Speaking during Monday’s council meeting, Bonfield said although the city does not know “the full depth and breadth and duration of the impacts of COVID-19 on our community, we can anticipate that the city will likely need to provide additional resources to support small and disadvantaged business, community nonprofits, families, and to cover increased costs associated with sanitation and space modifications in city facilities.”

Bonfield recommended keeping the property tax rate the same, at 53.17 cents per $100 of assessed value. That generates a tax bill of about $1,229 per year on a house valued at the median house value of $229,246—the median value of a Durham home—according to the county tax officials.

Bonfield also noted that a survey last year indicated that street paving and maintenance continues to be a significant concern for residents. His proposed budget reduces funding for street paving from $10 million to $6 million. According to Bonfield, this limited level of funding is not sustainable for more than one year. Other reductions include travel, training, fuel, and deferred maintenance.

Meanwhile, Bonfield says the city will continue to invest $68.5 million in upgrading and increasing capacity for water and sewer improvements including water and sewer rehabilitation, future water supply, and Jordan Lake reconstruction. He said a “modest increase” of about 2.9 percent for the average customer in water and sewer rates will be used to support ongoing capital, operating, and sustainability efforts.

A virtual public hearing for the proposed budget will take place on June 1.

Contact staff writer Thomasi McDonald at tmcdonald@indyweek.com.

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