Richmond budget plan has no cuts in service

Richmond Mayor Dwight C. Jones is proposing a $637.3 million city budget for next year that includes 11 layoffs, no raises for employees and no cuts in services.

The plan, released yesterday to the City Council, represents an increase of $7.3 million over this year's budget and about $200,000 more than what was forecast a year ago for fiscal 2010-11.

Officials managed to avoid a predicted shortfall of $33.6 million -- and avoid deep cuts in services -- by offering a series of administrative and systematic changes to either boost revenues or reduce spending.

Jones dismissed any need to increase the real estate tax rate above its current level of $1.20 -- as council members are considering -- and he said his proposal employs measures to fund services based on desired outcomes and to elevate the city's standing with bond-rating agencies.

"We are using sustainable revenue strategies and not just one-time tactics," Jones said. "We want to budget on solid ground, making the necessary sacrifices, streamlining operations and initiating strategic investments."

In that regard, Jones is proposing a switch from annual to semi-annual collection of real estate taxes. The move is estimated to save $1.7 million annually because the city would be able to avoid interest payments associated with short-term borrowing, which is now necessary to maintain cash flow.

If approved by the City Council, the change would not affect the total tax bill for individual payers. Instead, the total would be split into two payments, due in January and June.

Jones also is proposing to dissolve the Broad Street Community Development Authority, which is expected to produce a savings of $2.5 million annually.

The city would then look to restructure the authority's debt at a lower interest rate. The city has been forced to dip into its general fund to meet its obligation to help the CDA cover annual debt payments on a series of sidewalk and parking improvements downtown.

In addition, the proposed budget assumes a $3 million saving associated with a planned consolidation of health-care services for employees of the city government and school system.

Officials also are projecting increased revenues from a more-aggressive collection of delinquent taxes, as well as a new $30 administrative fee for taxpayers who are late paying real estate and personal property bills.

The city also is counting on savings from outsourcing some fleet services and departmental efficiencies.

After his presentation, Jones told reporters he's confident in his administration's projections. "There's no fluff," he said.

Officials said the budget meets the School Board's request for $149 million and supports local nonprofits at current-year levels. The proposal avoids employee furloughs but eliminates eight vacant administrative jobs, in addition to the 11 layoffs. Details of the layoffs were not released, but Chief Administrative Officer Byron C. Marshall assured council members that the cuts would not affect police and fire service or the commonwealth's attorney's office.

He added that some departments might see their budgets drop, but the reduction won't mean a service cut.

"The public won't see any diminution of services," he said.

Council President Kathy C. Graziano said the Jones administration seems to have done a good job compensating for dramatic reductions in revenues, including state funding. She said she likes the idea of semi-annual tax collections and dissolving the CDA to get a handle on the city's subsidy payments.

"It seems to make sense to address this head-on," she said.

Jones also is proposing to spend $90.2 million on capital projects next year, with an emphasis on tree planting, road paving and pothole repair. "We're looking at things that people complain about," Marshall said.

Overall, the total capital portion includes $3.6 million for schools; $11.7 million for street, sidewalk and traffic improvements; $6.2 million for economic and neighborhood development; and $68.7 million for city facilities. The plan also includes $57.7 million for utilities projects.

Contact Will Jones at (804) 649-6911 or wjones@timesdispatch.com.