-
Tom Butt for Richmond City Council The Tom Butt E-Forum About Tom Butt Platform Endorsements of Richmond Councilmember Tom Butt Accomplishments Contribute to Tom Butt for Richmond City Council Contact Tom Butt Tom Butt Archives
-
E-Mail Forum
RETURN
Richmond Fiscal Strength Contrasts With Many Cities and Counties

As Vallejo is verging on bankruptcy and many other cities and counties are facing fiscal crises, Richmond remains strong. Note the article copied below in todayís West County Times, and compare it to what is happening in Vallejo http://www.contracostatimes.com/search/ci_8334950?IADID=Search-www.contracostatimes.com-www.contracostatimes.com).

 

Richmondís comparative success is in large part due to at least four factors:

 

  • The Richmond City Council, with remarkable and unprecedented unanimity, took strong and often contentious measures in 2004 to avert a fiscal crisis and set the City on a future course of economic responsibility. Some of the measures included establishing an adequate reserve, reforming pension obligations, updating accounting and management procedures, advocating for tax increases, updating fee schedules and balancing the budget.
  • The residents of Richmond voted to support increased taxes.
  • Richmondís public employees had the foresight to see how a fiscally strong city would benefit them in the long run, and they agreed to necessary benefit reforms. Eventually, all laid-off employees who wanted to be were re-hired.
  • A fiscally-strong team of City Manager Bill Lindsay and Finance Director Jim Goins have steered the City in a fiscally responsible direction.

 

There are still some risks that may affect Richmond, the worst of which could be a successful property tax appeal by Chevron. On the other hand, there are some opportunities. One that went unexploited in the 2004 debacle is franchise fees. I recently discovered that virtually all of Richmondís franchise agreements with pipeline and utility companies have expired, and there may be opportunities to force these entities to pay higher fees when new agreements are negotiated.

 

Slumping Economy May Not Mean Cuts

 

RICHMOND: Finance Director Optimistic, Touts Strong Financial Position

By Katherine Tam

STAFF WRITER

Article Launched: 02/22/2008 03:11:13 AM PST

 

Despite a depressed housing market and economy, the city of Richmond is expected to survive this fiscal year relatively unscathed and without budget cuts.

Conservative revenue estimates, improved financial controls and a healthy reserve have paved the way for the city's financial stability, Finance Director Jim Goins said.

"We are in the strongest financial position we've been in in seven years," Goins said.

The city must weather additional challenges such as the sluggish real estate market and state budget cuts, including the deferral of millions in gas tax payments to cities. That's more than $1 million for Richmond.

"It's not just about this fiscal year," Councilwoman Ludmyrna Lopez said. "We're not out of the woods. We still have fiscal challenges ahead of us, and some of these things are out of our control."

Goins added:

"The nice thing is we have a strong cash reserve," he said. "We have money to wait for them to reimburse us."

This week's midyear budget review carried some changes to the $132.5 million operating budget adopted in June, the beginning of this fiscal year.

Revenue is coming in $609,000 below initial projections. Property and sales taxes are higher than expected, largely due to more business-to-business sales transactions in the industrial port area and the opening of Wal-Mart in April. But those gains were offset by revenue losses, particularly in fees collected on real estate documents that have dipped along with the housing market.

In addition, the city added $891,000 in expenses for such services as more library hours, paratransit, parks, landscaping, earthquake insurance and fire services.

Officials will be able to cover the revenue loss and additional expenses by tapping the city's $1.5 million operating reserve. Richmond still has a separate reserve fund of at least $10 million, which remains untouched, Goins said. The city also has $12 million in unreserved fund balance, which is the amount of unrestricted cash the city has on hand now.

The budget remains balanced, a significant benchmark as Richmond continues to recover from years of fiscal mismanagement that culminated in a $35 million budget crisis in 2004.

City Manager Bill Lindsay arrived in Richmond in 2005 and hired a number of new department heads, including Goins, who received the 2008 Award of Excellence in Public Finance from the California Society of Municipal Finance Officers. In addition, the Government Finance Officers Association of the United States and Canada recognized the city's Finance Department with a budgeting award for the second year in a row.

The general fund pays for public services such as police, fire, roads and parks. The city's total budget, including redevelopment money and capital project funds, totals $290 million.

The city has 120 vacant positions, with the largest number in the police department.

Reach Katherine Tam at 510-262-2787 or ktam@bayareanewsgroup.com