Richmond council faces decision on raises for retirees

The Richmond City Council could decide Monday between giving a 1 percent raise to city retirees and squirreling away funds to weather the stormy economy.

The council's Finance Committee made no recommendation yesterday as it forwarded to the full council a proposal to spend $2.2 million in leftover funds from fiscal 2006-07.

Of the total, $1.8 million would go toward a 1 percent cost-of-living increase for retirees, while nearly all of the rest would help fund school-system operations.

The City Council, which has supported a 1.5 percent increase for retirees, is scheduled to vote on the proposal Monday.

Yesterday, city finance officials said they're bracing for state budget cuts from $3 million to $5 million, but they also said it's unclear how much of a hit city revenues will take.

"We've taken some pretty significant steps to slow down spending by the government because we simply don't know," said Chief Financial Officer Harry E. Black, referring to a freeze on hiring and curbs on spending.

The full council also will consider the Finance Committee's recommendation to strike a proposal to make employee raises take effect Oct. 25, rather than Dec. 20.

Mayor L. Douglas Wilder had offered the 1 percent increase for retirees to help settle his dispute with the council over whose budget should be in effect for the fiscal 2008-09 budget.

Black, who is leaving his position today for a job in the private sector, said the council may want to rethink the retiree raises in light of the stock market's troubles.

The market value of the Richmond Retirement System's assets dropped from $511 million to $386 million from the end of June to the end of October, Director Philip R. Langham said. He said the system would contribute about $50,000 to the raises, which would apply retroactively to July 1. The system provides benefits to nearly 4,000 retirees.

Also yesterday, Black released the city's comprehensive financial report for the fiscal year ending June 30. It reports general-fund revenues exceeded expenses for the year by $1.1 million, as well as a year-end fund balance of $64.5 million.
Contact Will Jones at (804) 649-6911 or .