Durham City Council Work Session - May 27, 2026: Property Evaluation Appeal Impacts and Long-Term Planning
The Durham City Council grapples with a shrinking property tax base, difficult budget cuts, and pay decisions for city workers while trying to maintain services without raising taxes. Council and county tax officials also unpack the recent property reappraisal, long-term capital plans, and who really bears the cost of fees versus taxes. 51mins
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Original Meeting
Wednesday, May 27th, 2026
15043.0
City Council Work Session on the Budget May 27, 2026
Video Notes
Welcome to the City Council FY26-27 Proposed Budget Work Session for May 27, 2026.
- Agenda: https://www.durhamnc.gov/204/Budget-Development-Process
- Contact the City Council: https://www.durhamnc.gov/1323
NOTE: Comments left on this livestream will not be read or entered into the meeting record
In This Video
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Director Riordan and City Manager Ferguson described how departments were asked to propose 3–5% budget cuts, including reductions to outside agencies and the elimination of pay-for-performance raises in favor of a smaller structure adjustment, in order to balance the budget without raising taxes or cutting core services.
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Council members probed how the requested 3–5% departmental cuts translated into an overall reduction and what was actually being trimmed, and Budget Director Riordan explained that the city prioritized savings like ending an outside contract for community conversations and bringing that work in-house to avoid direct service impacts.
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Budget Director Riordan outlined targeted investments in priority areas despite fiscal constraints, including new fire positions and homelessness funding, support for Durham Youth Works and fare-free transit tied to a 10‑year capital plan, and enhanced employee compensation through a higher minimum livable wage, structure adjustments, and a class and compensation study.
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Council Member Carl Rist confirmed that the budget assumed roughly 3% annual growth in general property taxes, and Budget Director Riordan outlined next steps including closely monitoring tax revenues, completing a class and compensation study for FY28, developing long‑term funding strategies for transit, parking, homelessness and affordable housing, advancing violence intervention in partnership with the county, and finalizing a refreshed strategic plan for Council adoption.
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Council Member Matt Kopac and City Manager Bo Ferguson discussed balancing progressive property taxes with potentially regressive fees, using solid waste and water charges as examples, and noted that while the tax rate stayed flat, rising fees effectively increased costs for many households based on Council’s service and conservation priorities.
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Tax Administrator Doyle explained how setting appropriate valuation hold backs protected budgeted revenue amid appeals and exemptions, illustrated this with corrected year-built data for Crest Street properties that reduced values, and reported that appeal decisions cut $4.3 billion from total value (including $3.1 billion from the budgeted tax base).
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Tax Administrator Doyle explained that most appeal-related value reductions came from commercial properties rather than residential, used a Crest Street example to illustrate the relatively small impact of correcting 40 homes, and clarified that measuring the ‘success’ of appeals depended on how even small valuation changes were counted, noting they would need more detailed data to separate no-change outcomes from adjustments.
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Tax Administrator Doyle reported that appeals and resulting valuation changes were higher than in past cycles, emphasizing that they were part of a normal statutory process to keep assessments fair after real property values rose nearly 70% over six years and that these adjustments reflected a recalibration within an otherwise strong market.
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Mayor Leonardo Williams questioned the safeguards and technological capacity of the property valuation and appeals system, warning that delayed and voluminous data could destabilize city budgeting, while Tax Administrator Doyle acknowledged the concern and noted uncertainty about implementing real-time digital data submission.
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Mayor Pro Tem Caballero requested clarification on legal limits for joint city–county board appointments, confirmed the intent to maintain a four‑year reappraisal cycle, and called for a future joint meeting to review lessons from the recent revaluation before the 2029 cycle due to its major revenue impacts.
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Jim Reingruber, assistant director for human resources, introduced the upcoming fiscal year’s pay and benefits recommendations by outlining the city’s current pay landscape, showing how salaries rose with tenure, noting median and average pay levels, and highlighting that about 64% of full-time employees were at or above the market midpoint for their pay range.
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Staff explained that the proposed across-the-board 2% raise would bring recent annualized pay increases to roughly 7–13%, used a sample position to show how pay adjustments and the FY25 study produced a 48.5% salary increase over 6.5 years, and highlighted resulting pay compression as new hires now entered at the same step as longer-tenured employees while emphasizing that steps did not equal years of service.
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Staff reported that an active RFP for a new compensation study would include part‑time employees and a review of the minimum livable wage methodology, and outlined recommended FY25 pay adjustments including a 2% structure increase for all plans, implementation of the $25.09 Durham Minimum Livable Wage with related boosts for fire recruits and lower pay grades, and no pay‑for‑performance raises due to budget constraints.
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Staff previewed that the Durham Minimum Livable Wage would rise to about $27.38 next year if the ordinance stayed unchanged and detailed how the general step pay plan would be adjusted, including larger increases for the lowest two grades, 2% increases for the remaining grades, and a correction to keep step 11 on grade A12 aligned with step 10.
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City staff explained how raising firefighter recruit pay to the minimum livable wage compressed salary steps and could cause promoted recruits to bypass step 0, outlined a possible fix by reducing the promotion increase to keep them on that step, noted similar though smaller compression issues for police due to the lack of pay‑for‑performance raises, and confirmed that eligible part‑time employees would receive the same 2% structure adjustment.
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Reingruber explained that the step pay plans required a fixed 5% pay-for-performance increase, and that funding both the 2% structure adjustment and pay-for-performance would nearly double general fund costs to about $10.9 million, likely necessitating a tax increase, so pay-for-performance was not recommended for this budget year.
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Staff highlighted the city’s highly competitive benefits package—including free employee-only medical coverage, generic prescriptions, new cancer screenings for firefighters, a Roth 457(b) option, and expanded learning opportunities—while Mayor Pro Tem Caballero contrasted these benefits with more limited offerings in the private sector and emphasized the substantial value of the city’s health insurance.
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A speaker clarified that the 10‑year capital plan did not yet account for major future needs such as homeless and affordable housing capital projects or long‑term transit and parking costs, and emphasized that it focused only on projects needing FY27 or planned future appropriations while many other already funded projects continued separately.
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A speaker outlined upcoming facility maintenance projects—including completing Fire Station 19, starting Fire Station 21, enhancing fire station security, upgrading the environmental and storm services building, finishing the emergency operations center, and repairing a Carolina Theatre elevator—while explaining that some projects were advanced due to impact fee eligibility and affirming that the planned FY27 and future appropriations appeared affordable over the next 10 years.
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Mayor Pro Tem Caballero relayed trail advocates’ frustration with long-delayed projects, called for a resident working group on capital improvements, and urged staff to right-size the organization by reallocating outdated roles to build project management capacity so the city could deliver its CIP commitments.
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Mayor Williams reflected that local government required balancing long-term projects with urgent deterioration issues, emphasized that this meeting offered a valuable lesson in how the city responded to residents over time, and thanked Council colleagues while encouraging the public to rewatch the discussion.
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