City report offers grim view of future revenue, expenses
Jeremy Lazarus | 2/1/2018, 9:18 p.m.
Richmond appears to be booming. Construction is underway on new apartments, commercial space and government buildings.
And state reports depict growth in employment and a reduction in joblessness in the city.
As Mayor Levar M. Stoney noted in his recent State of the City speech, “Folks across the country have already noticed that our city is moving in a new direction.
“In 2017, Richmond was rated one of the South’s top cities by Southern Living. We made the top five in Business Insider’s Hippest Cities to live in for those under 30. Realtor.com has designated us as a Top 10 Tech Town. And Entrepreneur.com ranked us third on its list of ‘booming cities.’ ”
Just one problem: Richmond’s boom is not delivering a boost to the city’s treasury.
Mayor Stoney’s administration spotlighted the problem in delivering the latest five-year budget forecast to Richmond City Council.
That forecast projects that the expenditures needed to maintain government operations at current levels will exceed revenues in each of the next five years.
The grim picture painted in the Jan. 22 report is of a city under severe financial stress — a view the administration stoutly denied a few months ago when the state auditor of public accounts, Martha Mavredes, included Richmond on a list of cities facing serious financial problems.
The bottom line: Mayor Stoney and City Council will struggle to find the money needed to address the major challenges the mayor outlined in his State of the City speech, such as replacing obsolete school buildings, upgrading aging public housing, expanding after-school recreation and providing competitive salaries for city employees.
Richmond is expected to have $684 million to spend in its general fund for the 2018-19 fiscal year that will start July 1, according to the report.
However, the report states that the city would need $701 million to run the government and meet its obligations, or $17 million more than its projected revenue.
The $17 million would go to pay for the second installment of a three-year program to improve salaries for police officers and firefighters and to provide a 1 percent cost of living increase for the city’s retired workers — the first in nearly 10 years.
The city also wants to spend about $1.2 million to overhaul compensation and make wages more competitive for other city workers.
Also, the city must come up with $2.4 million to cover an increase in debt service on current borrowing and absorb increased costs to support its pension program and cover its share of employee health insurance.
Something must give in order for Richmond to balance its budget if the revenue picture does not change.
The report offers no indication that there will be a change any time soon.
Some City Council members have indicated that the city might need to reduce its workforce by 10 percent or more to cut payroll and provide a cushion to meet other needs.
Meanwhile, Councilman Andreas Addison, 1st District, wants Richmond to look for other sources of revenue. His thought: The city might need to lobby the General Assembly to allow the city to tax ride-sharing services like Uber and Lyft that compete with cab companies but do not contribute any money to the city treasury.