City manager proposes $722 million FY26 budget, cites revaluation and bond debt

City Manager Ferguson on Monday presented his first proposed budget for fiscal year 2025–26 to the Durham City Council, asking the council to adopt a $722,000,000 budget and a property tax rate of 43.71¢ per $100 of assessed value.

Ferguson told the council that a recent countywide property revaluation increased assessed values by 71.6%, producing an estimated $47,000,000 in additional property tax revenue. He said the proposed tax rate reduces the current 59.62¢ rate by 15.91¢ but remains 5.48¢ above the revenue-neutral rate of 38.23¢ calculated under state law.

The manager said the budget increase of roughly $54 million, or 8%, over last year’s $668 million budget would support public safety, infrastructure, employee pay and benefits and the debt service related to the $200 million bond program voters approved in November. “This rate allows us to invest in the services and the infrastructure that our community has asked for,” Ferguson said.

Why it matters: the package sets policy priorities and funds multi‑year projects. The council must adopt a final budget after public hearings and budget work sessions; Ferguson scheduled budget work sessions for May and a public hearing on June 2.

Major spending and program highlights - General fund: $326.5 million (proposed), a 6.6% increase mostly driven by employee pay and benefits and operating costs. - Property tax: proposed new rate 43.71¢ per $100 assessed value; median home (assessed $415,000) would face an estimated city property tax bill of about $1,814. - Water/sewer: an average monthly increase of $6.33 (about 8.5%) starting July 1 to cover operations and major capital work. - Bond program: debt service for the voter‑approved $200 million bond is explicitly funded; the presentation highlighted a $43 million aquatic center at Merrick‑More Park and $42 million to connect Longmeadow and East End parks. - Community safety and HEART: Ferguson proposed expanding the HEART crisis response program, adding 17 new positions including 9 crisis responders; he recommended prioritizing daytime expansion first. - Affordable housing and homelessness: continuing Forever Home Durham work, $27 million in ARPA-funded projects in partnership with Durham County, and a community‑wide homeless prevention strategy in development. - Infrastructure: a proposed CIP of about $537.6 million over the planning horizon; $315.7 million for water and sewer capital; $25.7 million for stormwater; nearly $6 million for equitable green infrastructure; $18 million for fleet replacements.

Public comment and council reaction Members of the public used the budget presentation as an opportunity to press for specific safety and housing priorities. Several speakers asked the council to fund design and construction of Vision Zero street safety projects on Roxborough, Mangum and Duke/Gregson streets and to continue funding the eviction diversion program and supportive services for people experiencing homelessness.

Council members praised elements of the budget while flagging areas they want to sharpen. Council members commended the manager for fulfilling a market pay program for staff and raising the city minimum livable wage to $21.90 per hour, but several members asked the manager to identify possible reductions and to be mindful of tax impacts on seniors and low‑income households during a revaluation year. Councilmember Baker emphasized support for continued fare‑free GoDurham bus service, calling it important to equity and operations.

Next steps and deadlines Ferguson provided the full proposed budget online at durhamnc.gov/budget and scheduled budget work sessions in May and a public hearing on June 2. Council members will deliberate changes at work sessions before adopting a final budget later in the month.

Ending: The council did not take action on the budget Monday; the presentation sets the starting point for weeks of deliberations and public input ahead of the June public hearing.