Hello, Durham County. On Monday night, I presented my Recommended Budget for the Fiscal Year 2025-2026 to the Board of County Commissioners and the residents of our great community.

As the newest Durham County Manager, I am poised to recognize and effectively address the significant challenges currently facing the county. I have lived and worked in this community for over 25 years. Over the years, opportunities and challenges have caused significant changes, and those presented in this budget are no different. In fact, FY 2025-26 is shaping up to be one of the more challenging years for Durham County government over the last two decades.

It is within this environment that I have worked alongside all County employees to make thoughtful and transparent decisions to set us on a sustainable path forward.

This proposed budget is a delicate balancing act between limited resources, resident economic stress, and nearly infinite needs. When you read through the document, it shows how funds are allocated and how they will be spent through the lens of our Strategic Plan, DCo Forward 2029, and our seven high-level focus areas.

The budget development process began with over $55 million in requests above available revenues. Many of those requests were ultimately unfunded due to fiscal constraints. Many worthy initiatives remain unfunded due to fiscal limitations. This budget strategically invests in solidifying recent County achievements, addresses immediate challenges, and positions us for future success. While numerous opportunities exist to expand services and programs, resource constraints necessitate focusing on investments that will deliver the greatest long-term value for our County.

Where possible, I have tried to limit property tax rate increases and their impact on residents. We do this by maximizing efficiencies and limiting the expansion of services to areas that provide the highest return on investment for all residents. The reexamination of core services acknowledges that certain services (usually mandated) are vital to all County citizens and must be provided with the highest skill and standards at all times.

These services include areas such as ambulance response times, funding support for Durham Public Schools, maintenance and repair of County property and buildings, Fire Inspections, Child Protection Services, Public Health programs, internal services such as Finance and Human Resources functions, and replacement of County vehicles and equipment, such as Sheriff patrol cars, EMS ambulances, and IT equipment that supports other department’s needs. All these services and programs must be provided and done well, and before and in concert with other services. However, when available funding limitations exist, hard choices are required so core services are not underfunded or ignored, before major issues occur.

January 2025 saw new County valuations for all real property. This valuation change equates to a 60 percent increase in total property valuation. This valuation increase is offset by a corresponding “revenue neutral” property tax rate decrease, down from 79.87 cents to 51.92 cents. This “revenue neutral” rate is in accordance with state law, but the County is still allowed to approve a tax rate increase on top of the revenue neutral rate.

Slowing growth in other revenue sources, such as sales tax and state/federal funding, competes with higher service demand or higher costs; the options to fill those gaps are limited to property tax increases.

With those realities, I am proposing a 3.5-cent property tax rate increase for this recommended budget. This increase will add $30 million in new revenue to support education, public safety, meet increased service demands in key mandated areas, address talent retention, provide funding for aging facilities, capital projects, and ongoing debt service needs. The increase is 2.5 cents for the County’s General Fund and 1 cent for the Capital Financing Plan Fund. This will bring the tax rate to a proposed 55.42 cents per $100 valuation.

As in prior years, education remains a high funding priority, and to that end, I am recommending a Durham Public Schools funding increase of over $10 million, for a total of $222,954,882. This marks the fifth year in a row the County has increased local school funding by over $10 million and brings the per-pupil expenditure to $5,496 – up $128 per pupil – and keeps us in the top five locally funding school systems in the state.

Effective local government depends on our employees' dedication to delivering essential services. Funding was allocated to support merit-based salary increases for employees. This is budgeted at 3%, totaling $5.6 million, with additional funding to address increased employee health benefits.

While County departments expressed needs for expanded programming and new services, in light of the slowing overall revenue growth, we have identified the need to focus on maintaining existing programs and ensuring a robust review of mandated services is conducted in the coming fiscal year. To ensure certain programs were supported, departments were asked to reallocate wherever possible from existing budgeted amounts. The County is expanding its authorized personnel strength by 44.5, with a net total of 11.2 positions. Keeping this net increase lower than recent years was accomplished by a review of existing vacancies and realigning those positions. 

Other highlights covered in the Manager’s Recommended Budget include:

• New positions focused on community safety areas
  • 12 new Emergency Medical Services (EMS) first responders to improve peak-time shift coverage
  • 5 new law enforcement officers for the growing Research Triangle Park area
  • 8 new Youth Home counselors for the third and final phase of opening the new building and implementation of the Resources for Youth Success and Empowerment (RYSE) Assessment Center
     

Copies of the FY 2025-26 Recommended Budget, Budget Summary Document, and Budget Presentation will be on the Durham County Budget Department webpage as viewable or downloadable PDF documents.

As I stated earlier, this is not the final budget. The Board of Commissioners will now take the next few weeks to deliberate, take public feedback, and decide on any adjustments.

Budget Work Sessions are planned in May and June. The dates, subject to change, are as follows:

• Tuesday, May 20, 9 a.m.
• Thursday, May 22, 1 p.m.
• Thursday, May 29, 9 a.m.
• Tuesday, June 3, 9 a.m.
• Thursday, June 5, 1 p.m. (if necessary)

A Public Hearing for the FY 2025-26 Budget is scheduled for Tuesday, May 27, 2025, during the BOCC’s Regular Session at 7 p.m. Residents may sign up to comment on person or virtually by contacting the Clerk’s office at 919-560-0025 or on site before the meeting.

I also encourage all residents to make comments about their priorities by taking the Fiscal Year 2025-2026 Resident Budget Survey. It will be open until Friday, May 30th.

The Board of County Commissioners is scheduled to vote on the approval of the 2025-2026 Budget Ordinance during its Regular Session on Monday, June 9. All of these Board sessions will be held inside the Commissioners’ Chambers, located on the 2nd Floor of the Administration I Building at 200 E. Main Street in downtown. Details on how to join via Zoom are also made available on our social media and website before each meeting.

Guiding our organization’s fiscal and programmatic direction through this turbulent economic and political environment is a major challenge that everyone in Durham County government faces. Short-term remedies or solutions are only so helpful for an entity that must plan for the future.

With this, my first recommended budget as County Manager, I want residents, the Board, and every employee to know that Durham County has been and will be my home. While I serve as your County Manager, I will always strive to put Durham County in a position to “land strong” in light of current and future uncertainties. I will always believe in the energy and passion that defines Durham County government.

Sincerely,

Claudia O. Hager | County Manager