Stoney administration now projecting $13.75M net surplus at close of FY2020
Using updated but still unaudited figures, the City of Richmond administration is now estimating a calculated net surplus of $13.75 million at the close of FY2020.
This surplus constitutes approximately two percent of the general fund budget, illustrating successful cost-saving measures and conservative revenue forecasting in the early stages of the pandemic.
As required by Ordinance 2017-215, the Department of Finance has prepared a summary of the city’s estimated general fund balance as of June 30, 2020 for City Council. That report indicates that the calculated surplus, above and beyond such required reserves as the unspent meals taxes for school facilities and the encumbrance roll forward, is estimated at $13.75 million.
“Our financial reporting continues to indicate that the city has weathered the economic impacts of this pandemic locally,” said Mayor Stoney. “This surplus is derived from fiscal responsibility and prudent management of our taxpayers’ dollars.”
The city’s fund balance policies listed in that ordinance require 50 percent of the calculated surplus go to “rainy day” reserves, 40 percent go to the Capital Maintenance Reserve and 10 percent go to Special Purpose reserves.
Mayor Stoney is recommending the Special Purpose reserves go toward funding the City of Richmond equity study, initiatives to address racial health disparities and post-employment benefit liabilities.
At the close of the third quarter of FY2020, city administration was prepared to draw over $6 million from its contingency reserve, or rainy day fund. Instead, based on this latest financial report, it is estimated that $6 million will be added to that reserve, along with another $875,000 to be added to the unassigned fund balance.
“We are pleased to report that local tax collections ended up even better than our most recent projections,” said Director of Finance John Wack. “This, coupled with such efficiencies as a temporary hiring freeze and moratorium on discretionary spending, is leading to even stronger rainy day reserves as we close out the fiscal year.”
The Comprehensive Annual Financial Report (CAFR) will include the final audited amounts for the various general fund balance reserves. The CAFR will not be available until near the end of the calendar year. This estimate surplus is currently unaudited.