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Mayor releases adjusted FY21 budget with projected revenue loss due to COVID-19

Posted at 1:32 PM, Apr 13, 2020
and last updated 2020-04-13 17:39:25-04

RICHMOND, Va. – Richmond Mayor Levar Stoney released his adjusted FY21 budget based on nearly 5% reduction in projected revenue due to the coronavirus.

The mayor’s initial proposal was based on a $782.6M general fund revenue projection. That projection is now estimated to decrease by $38.5M and now stands at an estimated $744.1M, a 4.9 percent decrease.

“Budget and council staff have been working together tirelessly since the mayor declared a state of emergency in the City of Richmond, aiming to adapt the proposed FY21 budget to the new restrictions posed by the economic effect of the pandemic,” the Stoney administration said in a release.

Stoney says his updated budget proposal will still prioritize school funding, fixing roads and sidewalks, and making the city a more equitable, safe place to raise a family.

In respect to schools, the revised budget will still allocate more to RPS than the city did in FY20, following council-approved guidance to dedicate a certain percentage of real estate tax revenue to schools. A total of $181M will now go to RPS, compared to roughly $175M in FY20.

Also in response to the COVID-19 pandemic, city residents will no longer have a utility rate increase previously proposed in the FY21 budget.

The administration says the move will have a $2.5M impact on projected general fund revenues. The city has adjusted for this change by making further cuts to department budgets.

“This international crisis is forcing local governments everywhere to make tough, sometimes heartbreaking decisions when it comes to budgets,” said Mayor Stoney. “In Richmond, we’re blessed with a team unified around our shared values: equity, opportunity, and fiscal responsibility to our residents. This adjusted budget reflects those values.”

The following items funded in the original FY21 budget have been eliminated:
• 2 percent salary increase for employees;
• Step increases for public safety personnel and base salary increases for public safety recruits;
• Nearly $9.4M in currently funded full-time and part-time employee positions, and the elimination of 12 proposed new positions throughout the administration, including in Citizen Service and Response, Parks and Recreation, Human Services, and the City Attorney’s office, among others;
• Parks, Recreation and Community Facilities workforce development program for returning citizens;
• Doula program run through the Richmond City Health District;
• History and Culture Commission operating budget; and
• Several non-departmental allocations to nonprofits that did not receive funds in FY20.

The following items saw an increase in the original FY21 budget but have now been brought to FY20 funding levels:
• The Affordable Housing Trust Fund, which was slated to receive $3.5M but will now receive $2.9M;
• The Eviction Diversion Program, which was slated for a $201k increase but will now receive $485k; and
• Many non-departmental allocations to nonprofits that received funds in FY20.

The following lists do not include all changes. The finalized amendments will be available once they are formally submitted to Richmond City Council by April 20.

Stoney says the city was originally expecting a budget surplus at the end of FY20, but due to the coronavirus, the city is now projected to face a shortfall at the end of FY20.

So, the city has implemented cost-saving measures such as a hiring freeze and a moratorium on all discretionary spending to help offset the effect.