Tuesday, January 12, 2010

Mayor Dwight Jones' Annual State of the City Address

WHO: Mayor Dwight C. Jones

WHAT: Mayor's annual State of the City address

WHEN: Tuesday, January 26, 2010
6:30 p.m. - 8:30 p.m.

WHERE: Richmond CenterStage
Carpenter Theatre
600 East Grace Street
Richmond, VA 23219

BACKGROUND:
Mayor Jones will provide an account of the current state of Virginia's capital city during his initial State of the City address. Address highlights will include the budget shortfalls the Jones' Administration resolved in early 2009 as well as detailing the strategy to overcome forecasted budgetary challenges. Other address highlights include economic development, schools, infrastructure, quality of life, public safety, and building Richmond's future as a tier one city.

Complimentary parking will be available across from the Grace Street side of CenterStage. Parking entrances are on 6th and 7th Streets.

Contact: Tammy Hawley, (804) 646-3110

Monday, January 11, 2010

City Budget Gap in $30 Million Range for FY2011

~FY2010 picture shows an improvement while structural imbalance remains~

Prior to its first meeting of the new decade, City Council members met with Mayor Dwight C. Jones over an informal breakfast today to discuss the city’s plans related to the previously announced FY2010 budget shortfall. Mayor Jones convened the breakfast briefing to also begin a review of the FY2011 budget forecast.

The Administration initially announced the current year (FY2010) budget gap in November of last year. However, new indicators have reduced the anticipated shortfall from $10.3 million to an estimated $2.8 million. “This is largely a result of unanticipated improvements in real estate and sales tax performance, as well as a better picture of State Payment in Lieu of Taxes (PILOT),” said Mayor Jones. “Preliminary indicators suggest that real estate assessments should generate approximately $4 million more than anticipated and that the sales tax picture has improved and should also be positively impacted by the statewide tax amnesty program.”

Mayor Jones cautioned that while the FY2010 picture has improved, the anticipated challenges for FY2011 and beyond remain as the ongoing economic crisis continues. “While we are in a position to adequately address the current year fiscal challenges through a mixture of upward revisions to revenue, one-time savings opportunities, and minimal expenditure reductions; these strategies will offer us little assistance for FY2011,” said Mayor Jones.

“The problem for 2011 is a problem involving three factors: 1) our local revenues will show a very small percentage increase next year, 2) State revenues will likely decline – maybe even significantly, and 3) the projections for some key spending items show big increases. We face a structural imbalance that will result in a gap in the range of $30 million for FY2011.”

The mayor also noted that state cuts will likely cause an increase to that number pointing out the $7 million in cuts that the city is now aware of in the proposed state budget crafted by outgoing Governor Tim Kaine. The city will not have a final number to work with until the General Assembly completes their consideration of the state budget in late-March.

“Clearly closing a gap of approximately $30 million will not be a simple process. We are going to have to look squarely at agency consolidations, possible targeted layoffs and furloughs, outsourcing of services and even elimination of some services,” said Mayor Jones.

City officials are developing a process that will allow for employee input into the budget decisions and there are plans to engage the community through a series of town hall meetings with the public to discuss priorities.

Major driving factors for the structural imbalance the City faces include retirement and health care costs. The Administration noted that the five-year forecast suggests that the City will continue to face double-digit imbalances for the foreseeable future.

“It is inevitable that we will be forced to make some painful decisions as we navigate our way through this period of economic crisis. While we must respond to the immediate needs, ultimately we need to implement strategies that will help us grow our way out of economic uncertainty,” said Mayor Jones. “We cannot tax our way out of these kinds of situations, I want us to grow the city’s tax base and increase the revenue stream so that we are less vulnerable to economically challenging times. We need to focus on strategic investments which lead to economic development and job growth.”

The Administration has already proposed the consolidation of the Departments of Community Development and Economic Development. The Mayor is also emphasizing the importance of a regional approach for some of the broader issues like transit issues, tourism and sports matters connected to the Coliseum and the Diamond, as well as High Speed Rail.

The Finance Committee of City Council will receive detailed plans related to the FY 2010 shortfall and the FY2011 forecast at its scheduled meeting on January 21, 2010. Several policy papers are also being developed for Council consideration related to the City’s financial practices, economic and community development, employee heath benefits, and multi-modal transportation issues. A budget calendar is being developed for Council consideration and it is anticipated that, pending Council approval, the administration will submit its FY2011 budget plans on April 7, 2010.

Contact: Tammy Hawley, (804) 646-3110