Don Gosney: Richmond's Budget Deficit

The Richmond City Council hosted a Special Called meeting of the Council on Wednesday June 18th to discuss the budget deficit for the upcoming year.

Since there did not seem to be any coverage of this meeting in the local media, and because this issue will be discussed even further at the Council’s meeting on Tuesday the 24th, I’ve been asked to provide a synopsis so the public might arrive at Tuesday’s meeting knowing something of what was discussed earlier.

I could go through the 4+ hour meeting in detail but since people are fond of the Cliff Notes Version of our news, I’m providing a simpler retelling:

The City Manager gave a report indicating that after all is said and done, the City looks to be about $7.5 million in the red for next year.  Even after 17% cuts in almost every department, there still isn’t enough money to keep the City running.

  • There was a lot of posturing and campaigning from members of the Council with highlights being: In the report, we learned that the single largest source of income for the City is the Utility Tax with sales taxes and property taxes being slightly less.

  • The Mayor saw that a lot of City employees (SEIU people) were in the audience but had failed to follow the Council’s rules about signing up to speak before the agenda item was called. She expressed her concern that only three people had signed up to speak and that the employees might not have a chance to tell the Council how they should handle the deficit.  Even though these are City employees and should know the rules about signing up to speak, she was worried that they wouldn’t be given the opportunity to go on record and advocate for their jobs.  The Mayor reopened the speaker sign-in period allowing anyone who wanted to speak that opportunity.

  • Many people—including the Mayor and Vice Mayor, advocated for a Department Head Millionaire’s Tax (their phrase) where the budget would be balanced by firing or reducing the salaries of the senior members of the City staff.  The SEIU members in attendance seemed to be pleased by that with some of them probably wondering if they could cast their November ballots that night.

  • The City Manager spoke about how when Chevron’s modernization was completed the assessed value for the refinery should be increased by a billion dollars which would bring in more tax revenue.

  • The Vice Mayor spoke of how the new sales tax—to be voted on in November—would bring in mega bucks (about $7 million per year) and would solve their problems.

  • The Mayor and Vice Mayor made it clear that they would not abide with any layoffs or cuts to their programs—even if they had no way of actually paying for them.

  • Councilmember Bates pointed out that the cost of Labor was more that 80% of the City’s budget and the only way to reduce this deficit would be to reduce the cost of Labor.

  • A wise and knowledgeable member of the public (me) rose to point out that the Council should not rely on a sales tax that may have great difficulty in being passed by a voter base that has been declaring they’re tired of being taxed (reminding everyone of the recent defeats of the Doctor’s Hospital tax and the school bond).

  • He also pointed out that these wouldn’t go into affect until next year and the soonest the City would actually see any of that money would be a minimum of 10 months from now—doing the City no good today.

  • He further pointed out that the $1 billion modernization isn’t anywhere near a billion dollars and since the project really isn’t made up of capital improvements, it’s unlikely that the assessed valuation of the refinery would increase even by $100 million—and probably much less.  He reminded everyone that whatever benefits might be gained by this, the City should not expect to see these benefits for at least 4-5 years.

  • He continued to speak about how the Council has indicated that the new sales tax would be used to fix our roads and their new idea about taking that money and using it to pay the salaries and benefits of City staffers is a bait and switch maneuver.  Councilmember Rogers asked if this wise member of the community would still think it was bait and switch if the Council was to tell the voters in advance that they were going to use it to prop up the salaries and benefits of the staffers.

  • A couple of members of the Council spoke about how the Council had voted just 24 hours earlier to continue to pay for the campaigns of some candidates even though it may cost the jobs of at least two and probably three staffers.  This opened up a lengthy “discussion” about some members of the Council being in the pocket of Chevron.

By Richmond standards, it was a relatively boring meeting.  One side of the Chambers was filled with senior management personnel ready to answer questions (nearly two dozen) but few were called upon.  No homophobic or racist rants, no recesses or ejections by the Mayor but still plenty of politicking.

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