 Seven to zero. Thank you. And we have the general business agenda item 19 is proposed physical year 2015 16 budget and physical year 2016 2021 capital improvement plan and the city manager will present those to the council and the public. Thank you. Thank you. Good evening, Mayor Bell, Mayor Pro Tem Cole McFadden members of the city council city attorney Baker. City clerk city staff and residents present here this evening are viewing on the Durham television network. It continues to be my honor to be entrusted to lead this great organization and over 2400 employees committed to service within the organization and within the community. I am pleased to be for you this evening to officially present the proposed budget for the city of Durham for the 2015 2016 fiscal year. I believe this year's budget represents a tipping point putting us at a place where we see the vision of just a few years ago taking on all the characteristics of reality. We can see it. We can feel it. We can put it to use for the benefit of the community. It's a vision that's not yet complete, but one that represents an achievement that is the result of deliberate planning for Durham's future, a future we're experiencing now. Look around as you stroll down Paris Street or just take a drive down Main and Chapel Hill streets in the heart of downtown. Fuchsia Penguins now welcome visitors at the new 21C museum hotel. The frontage of the old McPherson hospital stands as a reminder of our past, but at the same time serving as a wonderful historic entrance at the new residence in on Main Street. On Chapel Hill Street, the familiar yellow and white of mutual savings alone is being reborn as a new hotel. In East Durham where Andrew Avenue connects with Driver Street, a recently completed streetscape is spurring a new vitality and investment in that area. On Roxborough Street where new housing, homes and apartments called Southside continues to rejuvenate a long neglected neighborhood. All around we see the change that has transformed our great city from downtown to our neighborhoods in a matter of just a few years. And I'm proud to say a city manager that Durham is ready for our future. Years of planning and prioritizing programs and projects and the steady leadership of Mayor Bell and the City Council have put us here at this time. So what does our future hold? No one really knows. Some factors are within our control, but some that may have a large impact on our long term plans and our economic growth and development or not. Just as we managed our operations and what might be described as tight budget times a few years ago to meet our community's most pressing needs, we must continue to be strategic in our decisions to be where we want to be in the next five years as a growing city. For the past four years, Durham's got it. The city's strategic plan has been the foundation of our planning, driving our operational needs and guiding the budget process for the city. Quite simply, these are areas of focus that you've told us if done well, make our city a great place to live, work and play. This year we've refreshed our strategic goals to reflect what residents tell us is important to them. We asked you what success in all those areas would look like. We believe after listening that we're on even stronger footage to use our strategic plan as the basis for our future. These goals will continue to support and connect programs and services that we can measure to ensure that resources are used efficiently, but also to determine that they are meeting the needs of the residents. In planning for the 2016 budget, we continue to scrutinize and prioritize services and programs making sure they support our strategic goals so that their outcomes help improve the city's economy, neighborhoods, management and infrastructure. Using the strategic plan is now a way of life in this organization. It isn't a phrase how the city of Durham does business. As in years past, we listened to elected officials and residents in many different ways as we prepared the budget. Again, thank you to the mayor and city council for your guidance and participation from the beginning of the budget process and to the residents who made their voices heard as well. Each budget continues to be a collaboration process that cannot be done well without the input of the council and the public. As usual in developing the budget, we looked at overall resources, financial and human, to understand what we need to sustain an innovative and high-performing organization, including cost of services, adequate resources to provide them, including fair and reasonable tax rates, along with the responsible debt ratios, bond ratings and reserves. At the same time, we continue to monitor potential state legislative impacts on our budget. As I indicated earlier, uncertainty at the legislature continues to affect our budget projections and decisions, similar to other large cities across our state. While major state revenues account, sales tax continues to increase, other fees were eliminated. Most significantly, the business privilege license tax, totally more than $2.9 million, had to be replaced from another source. The proposed total budget for fiscal year 2015-16 is $386.5 million, a nearly 1% decrease from last year. The proposed general fund budget, which covers the city's core services is $170.2 million, a nearly 3% decrease from last year. Again, years of aligning city operations to meet the community's highest priorities and improving collaboration between city departments and providing services have served us well. Not only did we avoid having to look for possible budget cuts to balance the budget this year, I am pleased to say that a tax increase is also not needed. The proposed tax rate remains at 59.12 cents per 100 of assessed value, meaning the average homeowner will pay $986.12 per year. Despite the construction boom we seem to see throughout Durham, the Durham County Tax Assessor reports that we can only expect a 2% increase in new taxable values for the 2016 budget, meaning a penny on the tax rate will equal $2,475,000. This rate includes a decrease in tax allocation to support the debt service fund to replace a large portion of the business privilege license tax that was eliminated by the state. This year a dedicated portion of the tax rate was also established in the solid waste fund to more accurately account for those operational costs. Other allocations for transit in the housing fund remain the same in this year's budget. The proposed general fund expenditures include modest increases in personnel and operating costs and a significant decrease in transfers due to the decision to pay for solid waste collection through a dedicated property tax allocation, which I just spoke about in the previous slide. The economy is steadily rebounding and population growth in Durham continues. However, it remains important that we continue to scrutinize programs and services and limit any increases to what is needed to accommodate this population growth and cost factors and support the strategic plan. The proposed budget uses $1.7 million of fund balance for a variety of one-time costs. The city continues to enjoy an outstanding credit rating by all rating agencies, and I'm pleased to report that fund balance is projected to be at approximately 21%, which is well above the budget guideline of 12%. Residents continually rank employee courtesy and customer service high on the city's resident satisfaction survey. We want to keep that rating high as well as to improve upon it. To further strengthen customer service throughout the organization, I'm recommending a city-wide review to determine how we can better coordinate customer service functions. We're also adding a new representative to the Durham OneCall staff and acquiring a new smartphone app so that the public can more easily report problems to us. Residents have high expectations for city employees, and rightly so. They want innovation, courtesy, and exceptional customer service. As an organization, we must continue to reward employees who are committed to meeting and exceeding those expectations with excellence in creativity and without excuses. I am pleased to continue the city's pay-for-performance system and rewarding employees who perform at a high level as a top priority. Within the proposed pay-for-performance plan this year, employees would receive an average 3.5% pay increase, while police and fire plans will increase 3-5%. The city's self-insurance health plan continues to perform well, and this performance coupled with employee wellness initiatives will require health insurance rates to increase only 3%. This is the first rate increase in over three years. Strong partnerships continue to be at the heart of the city's progress. Our partnerships with Durham County, the Greater Durham Chamber of Commerce, Durham Downtown Incorporated, and private and non-profit developers and agencies is stronger than ever. At the same time, we strive to reach out to distressed communities to ensure that everyone, no matter where they live, work or play, could be a part of our community's success. The Mayor's Poverty Reduction Initiative brought individuals as well as other organizations to the table to strategize and create ways to help many of our neighborhoods escape poverty. The administration and staff are ready to continue working with the various task forces to develop strategies and initiatives on this critically important call to action to reduce poverty neighborhood by neighborhood in year by year. Last year saw our collaboration expand and strengthen as we announced a new joint economic development strategic plan with the county and other partners to attract development to Durham aimed at growing the economy and providing jobs for adults and youth in Durham. This plan serves as a guide for our future to retain businesses and attract investments as we grow Durham's tax base. To that end, approximately $2.2 million is budgeted for economic development purposes, including continuing the Downtown Business Improvement District at 7 cents per 100 ses value on property within the improvement district boundaries. Support of the art scene continues to be vital to our economy as well. Support for many festivals, support for mainstay festivals such as the full frame documentary film festival, the American Dance Festival, as well as funding for newer events such as the Art of Cool Jazz Festival and the Bull City Sculpture Show continues in the proposed budget to help lasting impressions of the city's dedication to creativity and to the arts. Later this summer we will be bringing forth a new partnership proposal with Durham County and the Durham Convention and Visitors Bureau to establish a Durham Sports Commission with the goal of expanding sports tourism in Durham. Now let's turn to neighborhoods. As the strategic plan was updated, we asked what makes a great neighborhood? And here's what you told us. Neighbors who feel empowered by the city to improve their neighborhoods. Neighborhoods that have had have access to a variety of transportation. Neighborhoods that have various housing options that are safe and affordable. The city's neighborhood improvement services and community development departments work every day to partner with neighbors to meet those needs. To help strengthen these efforts, a code enforcement supervisor cut in prior budgets is recommended to be restored to ensure that code enforcement activities such as weedy lots and unsafe housing get the attention they need. Alternate ways to get around is important to residents, not just by vehicle but by walking. To help meet that need, $25,000 is proposed funded to match a $100,000 grant to update the Durham Walks Plan and no fair changes are proposed for transit services. The new Go Durham buses, formerly known as Durham Area Transit Authority or data, are continuing to be rolled out. Expanded routes and improved service will continue to be announced early this fall. The penny for housing will continue to address creating and sustaining affordable housing needs. Without question, Southside will serve as a model for future mixed use and mixed income developments. Tremendous progress at Southside continues. Currently 44 of the 48 home ownership lots are sold, reserved or have construction activity. 24 of those lots are sold to low to moderate income buyers. Construction on Phase 2 with 20 additional lots is projected to start next summer. And for renters, the loss apartments are also making great strides, with 93 applications approved as of May 14th, of which 72 are low to moderate income renters. And when it comes to vacant and boarded properties, the city has raised the bar. Over the past five years, nearly 450 boarded properties have been eliminated. In addition, the NIS department is replacing plywood with clear impact resistance sheeting called polycarbonate to improve the appearance of vacant housing, waiting to be transitioned to safe and suitable residences. Nowhere in this city are partnerships more and vital in our work, but to keep our communities safe and secure. As warranted, this area uses the greatest share of city's resources and personnel, as well as facilities and equipment. In fact, public safety accounts for $91.4 million in the budget, with almost 62% of that going to law enforcement efforts to keep our communities safe and secure. Reducing crime remains a high priority for our city. And while we recognize that crime rates fluctuate quarter to quarter and year to year, no number of homicides, assaults or other crimes is acceptable. While no additional police officers or firefighters are being recommended in the proposed budget, all sworn positions are fully funded. It's only reasonable to expect that as the city has continued to grow in population and size over the last few years, that which is expected to continue, we need to plan for significant additional police and fire personnel. I'm committed to continuing to work with both the police and fire departments throughout this year to better evaluate and prioritize how existing resources are being deployed, as well as what and how new resources would be deployed and what results the public can expect for any commitment of additional taxes directed here. Last week we also, later this week, we will also continue the discussion regarding the work of the Violent Crime Reduction Task Force and recommendations from the Department of Justice, as well as preparing to support Councilmember Eddie Davis as he prepares to lead conversations about police and community relations. In addition to providing programs and services that directly affect residents, taking care of city buildings, parks and roads is crucial for our future. For that reason, we continue to keep maintenance at the top of our priority list. City has made significant strides to commit funding over the past few years to address long-standing physical asset deficiencies. Certainly the work that surrounds us as the exterior renovations to City Hall continue is just one example. Funding is included in the budget to increase deferred maintenance to $600,000. Additionally, one-time funding of $108,000 is proposed to allow the General Services Department to acquire and develop a robust asset management software system. While we've come a long way over the last few years, the condition of our streets continues to be a top concern for residents according to the most recent survey. I am proposing that, in addition to the $500,000 for sidewalks, the street paving funding be increased to $2 million. Last year City Council voted to dedicate one-half cent of property tax, about $1.2 million for maintenance of parks and recreation centers. It was a good start, but more work is needed for park maintenance throughout the City. Therefore, the proposed budget continues the dedicated half-cent for much-needed park maintenance, including fields and court repairs. An average 3% rate increase for water and sewer will generate about $2.9 million for ongoing maintenance of water lines and other infrastructure. And there's no increase recommended for stormwater rates this year due to modest growth in the stormwater fund. You'll see some of the other major capital projects listed here, totaling more than $12.9 million for current and new projects. These projects are funded through a variety of fees, water and sewer revenues, revenue bonds, and other financing. At this point, we've done our best to recommend a budget that propels our city forward. It has been a collaborative process relying on the groundwork and longer-term financial and strategic plans developed over the last few years, and at the same time trying to predict what the immediate future holds. We remain committed to transparency in the city's budget as well as in the city's total operations. The new Open Government Portal is about to be launched next month to provide more direct access to city and county data. The city website is also undergoing a transformation. With a key update to make it mobile-friendly since more and more people are accessing websites through their smartphones and tablets. I am confident, more so than ever, that with this budget Durham's future remains bright. So bright you'll need shades. Now where have I heard that? I won't go there. Your thoughts about the 2015-16 budget are important. Feel free to send your suggestions and comments to the city by email, on the city's Facebook page, on the Twitter feed, by video submission on the city's YouTube channel, or even by contacting Durham one call. Here's your chance to let us know what you think. Then we'll respond to your comments and answer as many questions as we can during our third annual E-Town Hall meeting on Monday, June 1, which will be aired live on Durham Television Network and live streamed on the city's website. In addition to the E-Town Hall, here are some other ways you can let us know your thoughts. Copies of the preliminary budget are also available on the city's website, in the city clerk's office, and in the budget management services department. As always, special recognition and thanks to the budget and management services director Bertha Johnson and her staff, along with all the city department directors for their superior leadership to ensure that our strategic plan guides as well as aligns with the city budget priorities. I continue to appreciate and value the close working relationship between the mayor and city council and city administration as we think about what means the most to us as a city now and for generations to come. I've heard it said that a well thought out budget is how a city shows its residents that it cares. Personally, I can think of nothing that illustrates the value of thinking about the future than children and grandchildren. That became too clear for me last week as my wife and I welcomed our first grandchild into the world. While the actions we take now affect how we live, work, and play, we must always consider how they'll help the future 10, 20, and 50 years from today, if not for ourselves, for the people in our lives whom we care a lot about. Let's continue to work together and make Durham a place where great things happen. Thank you. Tom, that was excellent. I think it was a very balanced and well presented. It certainly covered the things that we heard throughout our budget deliberations with the community. The fact that we are presenting a balanced budget with no tax increase, I'm certainly sweet to a lot of people's ears. But we also know we've got spending time going through the actual details of the budget and we'll be doing that very shortly. But you put us in a great position and for that we're very appreciative and appreciative of the staff again. I know some of them are leaving but we understand that all of these things that happen in this community, I'm talking about the positive things that really happen because of the result of our staff and we're very appreciative of that. Thank you, Mayor.