View the Proposed Capital Improvement Plan for FY2014 - FY2015
Mayor Dwight C. Jones today presented his administration’s FY2014 - FY2015 Biennial Fiscal Plan (the budget). A 5-year Capital Improvement Plan (CIP) for the period of 2014 – 2018 was also presented.
The budget was crafted based on current revenue projections, which include revenues from the real estate tax rate, which is proposed to remain the same at $1.20. The total proposed spending plans for the General Fund are $760.5 million for FY14, and $766.3 million for FY15.
Mayor Jones has called for a major change in the city’s water rate structure and particularly the base water and wastewater rates. The Mayor’s proposal calls for a substantial reduction in those base rates (from the current base rate total of $49.40 to $26.11) as well as a move to charging for volumetric usage. This means that residents and businesses will pay more for higher usages of water and wastewater.
“Through this rate structure change, an estimated 50% of our residential households will see a decrease in their water and wastewater bills,” said Mayor Jones. “This action responds to the numerous voices, including mine, requesting a review of our structure and way to reduce the base charges.”
Mayor Jones said the city was prepared to honor the Richmond Public Schools request for a total of $129.4 million in funding. Jones’ budget provides an additional $500,000 on top of that to expand slots in the middle school IB program. The city budget also includes $2.4 million over five years in the CIP for maintenance of schools.
Mayor Jones also acknowledged the unknown impact of the Federal budget sequestration. “Anticipated cuts can impact not just our City government, but also our city coffers as well, since many of our leading businesses depend on Federal contracts or Federal spending of one sort or another to sustain their workforce and payrolls.”
With respect to payrolls, Mayor Jones proposed a 2% increase for city workers. This represents a $2.2 million net increase in full time salaries which will be effective in October 2013. “I want to thank all of our hard working employees in our great city and thank them for their continued efforts,” said Mayor Jones. The Mayor’s budget also holds the line on any increases to employees in costs for fringe benefits and has no increases in health insurance costs for the majority of city workers; although city workers may realize modest increases through plan changes.
The Mayor also underscored those efforts in his budget that tie in with his anti-poverty focus. For example, the budget expands workforce development programs, provides support for health resource centers, and invests in alternatives to incarceration.
Key revenue and expenditure and CIP highlights of the Mayor’s Budget are:
Highlighted changes from the FY13 Adopted include:
- Decrease of $1.0 million in Personal Property Tax based on historic collections and projected actuals;
- Decrease of $0.9 million in Machinery & Tools Tax based on less new equipment purchased and depreciation of remaining equipment;
- Decrease of $2.2 million in Communications Tax based on historic distributions by the Commonwealth and projected actuals;
- Decrease of $2.6 million in Bank Franchise Tax as net capital declines and money borrowed by banks during the Great Recession is repaid;
- Decrease of $2.9 million in State Payment for Social Services based on funding declines from the Commonwealth to the City;
- Decrease of $74.3 million in Data Sharing & Other Transfers from one-time revenues in FY13;
- Increase of $3.9 million in Real Property Tax collections based on a higher collection rate by the City and a marginal increase to assessed values;
- Increase of $4.1 million in Local Sales & Use Tax from audit efforts, increased disposable income, and stronger than forecast retail sales;
- Increase of $3.5 million in Prepared Food (Meals) Tax from audit efforts, increased disposable income, and stronger than forecast prepared food sales;
- Increase of $0.5 million in Sales & Use Tax for Education distribution from the Commonwealth (offset by an increase in pass-through funding to Richmond Public Schools);
- Increase of $1.2 million in Business License (BPOL) Fees as existing businesses continue to expand in turn with the economy;
- Increase of $0.5 million in Parking Fees & Permits from updates to hourly parking meter rates;
- Increase of $1.1 million in Reimbursement for State Shared Expenses based on the estimates from the Commonwealth’s Compensation Board;
Major changes in expenditures include:
- A $2.2 million net increase in full time salaries attributed to a 2% salary increase which will be effective with the first pay in October for eligible City employees;
- A $1.9 million increase in healthcare costs attributed to a 6.6% cost increase and the City absorbing both the employer and the employee / retiree shares of the increase;
- A $0.8 million increase in retirement costs due to changes in the rates specified by the Richmond Retirement System;
- A $22.6 million net decrease in operating costs that is primarily a result of having done one-time debt retirement payments of $27.1 million in FY13 which are no longer a part of the FY14 Non-Departmental budget;
- Projected savings of $3.0 million resulting from a Voluntary Retirement Incentive Plan (VRIP) for employees who have 25 or more years of service or are at least 65 years old (savings in FY15 are projected to be $6.5 million for the whole years) – employee separations would be completed by September 30th;
- General Fund payments for debt increase by $5.2 million to $64.5 million in FY14 and increase by $7.0 million to $66.2 million in FY15;
- The City’s proposed $500,000 increase to Richmond Public Schools increased their funding to $154.2 million in FY14 and $154.7 million in FY15 – this includes changes in the State Shared Sales Tax that is passed through from the Commonwealth of Virginia;
- Additional funding for the Police Department resulting from increased vacancy funding of 10 civilian positions for reclassification as Communication Officers for the Department of Emergency Communications; this along with increased retirement costs and other adjustments set the proposed budget at $84.0 million and $85.4 million with respective increases of $1.5 million and $3.0 million compared to FY13.
Capital Improvement Plan (CIP)
This CIP reflects the City’s strong commitment to infrastructure and capital improvements. In citizen surveys and Council District budget meetings, citizens overwhelmingly felt that street and sidewalk improvements were their highest priorities. This fiscal year saw the opening of two new elementary schools that will be followed by one middle school and one high school. Planning will also begin on another elementary school in the Dove Street area. This plan also includes funding for the 800 Megahertz radio communications system replacement.
- Streets – funding of $5.0 million is provided in FY14, and $20.0 million is provided over five-years
- Sidewalks - $650,000 is provided in FY14 and $3.3 million is provided over five years.
- School Maintenance funds of $500,000 in FY14 and $2.4 million are provided over five years. This is in addition to the $2.0 million currently available for spending.
- No funding for Schools ADA improvements were included in, as a mid-year amendment to schools Capital Budget for ADA added $.5 million to satisfy all ADA issues. There is currently $9.5 million available for spending
- Funding is proposed for a new Dove elementary school in the amount of $21.3 million over five years. The school will be a high performing Science, Technology, Education and Math (STEM) School that will serve pre-K through 5th grade in the Dove Street revitalization area.
- 800 Megahertz radio communications system replacement - $30.0 million is included over five years supported financially by the City, while an additional $3.5 million is provided by Public Utilities renewal funds.
- New Justice Center - $29.7 million is provided in FY14 and FY15 to complete this $133.6 million project. Construction is approximately 40% complete.
Economic & Community Development:
- Public Housing Transformation funds of $2.5 million in FY14 and $5.0 million over five years are provided to partner with private developers to redevelop severely distressed public housing complexes in Eastview – Whitcomb Court and Mosby Court, and the East End area – Creighton Court and Fairfield Court.
- Funds for the Riverfront Plan Implementation of $4.0 million are included in FY14 to fund the first phase of the recently adopted Riverfront Master Plan.
Culture & Recreation:
- $14.0 million is provided in FY14 to assist in the $60.0 million renovation of the Landmark Theater that is being implemented by the Richmond Performing Arts Center.
- Southside Community Center – funds of $3.6 million have been provided over five years to design and construct a Community Center in the Ninth Council district. Amenities would include a gymnasium, multi-purpose space, and ideally would be complimented by existing outdoor venues.
- Major Buildings Renovation – Funding of $1.0 million in FY14 and $8.0 million over five years has been provided for structural and system replacements and improvements in over 100 City-owned buildings.
- Police Impound/Tow Lot – Funding of $3.1 million over FY14 and FY15 will bring outsourced towing storage services in house, and upon completion, will generate new revenue to the City. The revenue will be used to support future capital projects.