Apr 27, 2016

The city of Richmond’s budget deficit for next fiscal year has grown from about $9 million to about $11 million as the result of various cost increases, a budget expert told City Council Tuesday.

Following up on his five-year budget forecast from December, public finance expert Russ Branson said if the city does nothing to remedy its budget problems it will face a $31.8 million shortfall by 2021, up from $22.7 million in his December report.

A $15 million increase in various costs from this fiscal year to next — including increases in city employee salaries, health benefits and pension costs — contributed to the $11 million deficit for fiscal year 2016-17, said Branson in representing the National Resource Network, a program assisting cities with ongoing financial challenges.

Starting with next week’s council meeting, City Manager Bill Lindsay said he will begin making recommendations on how to close the deficit. The cuts will inevitably result in a reduction of city services, Branson said.

Branson did not recommend layoffs, suggesting other ways to reduce $5 million in personnel costs. The city, he said, should attempt to gain concessions from its unions, eliminate vacant positions, reduce police and fire overtime, and do a better job of recovering more of the fees owed to the city for such things as construction permits. He recommended another $3 million in non-personnel cost reductions, including using fewer contractors to complete jobs and reducing city vehicle expenses.

Mayor Tom Butt, who has proposed a number of tax and fee revenue measures to deal with the longterm deficit, said the budget shortfall has placed Richmond and its council “between a rock and two hard places.” The shortfall is coming at the same time as residents are complaining about shoddy roads, overgrown street medians, an increasing homicide rate and an inadequate number of youth programs, Butt said.

“Then I get complaints from the unions who are concerned that we’re not building in cost of living increases for them and so forth,” the mayor said. “I get complaints from the budget hawks, the people who are disappointed that Measure U didn’t pave their streets and so forth. Everybody’s got a complaint, nobody’s got a solution.”

Councilmembers Vinay Pimple and Nat Bates, who have been calling for an audit on city spending, also expressed frustration.

Not all councilmembers were as concerned. Councilmember Gayle McLaughlin, one of three Richmond Progressive Alliance (RPA) members on council, said she trusts the City Manager will find creative ways to provide solutions to avoid layoffs.

“I don’t think the panic button should be pressed by any means,” McLaughlin said.

Gaining concessions from unions will likely have political implications. After all, RPA members who make up a near-majority on council listed SEIU Local 1021, which represents city employees, as a major supporter in their last campaign elections.

Council has until July 1 to adopt next fiscal year’s budget.


  1. All the cronies aren’t worried. They will continue to get paid, and paid-off while they drive another nail into the proverbial coffin of the City. Spend and laugh. Milk it for all its worth and just before it dies, bail out like rats. At the 11th hour they will come up with another tired, crooked plan to tap the Refinery for more money to bail them out for one more election. How many times will the Citizens of this once proud City be fooled ? Maybe ONE more time.

    Observation of Shameful Behavior | Apr 28th, 2016
  2. Unfortunately, I am not surprised. City officials has been warned for years about its mismanagement and extensive spending practices to no avail. When will the citizens step-up and say enough is enough. When will the citizens stop voting these non productive people into office. People who have no solutions to problems, spend and waste our taxpayer dollars, have no desire or courage to do what is necessary to stop the bleeding (RPA), and continue to destroy a city I love..

    I’m fed-up, when will you be. Wake-up Richmond Residents!!

    Tired of the incompentence | Apr 28th, 2016
  3. More on this can also be found here:

    “The city has begun to address its shortfall by eliminating already vacant positions at City Hall and tapping a tax measure that had been promoted for road repair.”

    Folks, that would be Measure U that they are referring to. Yes, the very tax that some of our City Council members ran on during their 2014 campaigns, saying that it would be used to repair our roads, increase public safety, etc. Sadly, they were fully aware of our City’s future financial cliff, choosing instead to shelve/hide a dire five-year financial forecast from public review rather than reveal this important information and enable voters to make well-informed decisions. This “missing” five-year plan/forecast was discussed at length in previous threads on Nextdoor in the fall of 2015.

    As per the City’s budget analysis a few months ago, our General Fund balance of ~$10MM was being met by two sources:
    1) 100% of Measure U funds, and
    2) the remaining ~$1.5MM of the RecycleMore funds.

    The pillaging of our RecycleMore funds was yet another plan orchestrated by some in this City (not the other cities in the JPA) to “quietly” generate an additional ~$2.2MM in one-time revenue. The remaining balance (~$1.5MM) is currently being used to “balance” the City’s General Fund for FY2015/16.

    And yes, you guessed it, that will ultimately result in yet another higher tax on all of you. Have a good look at your Richmond Sanitary bills and note the higher % increase we had this year compared to each of the past five years. Do you think they are linked?

    This is also the very reason why some were opposed to allowing these reserves to be tapped in the first place. One could also have easily argued that if the reserves were so healthy, then perhaps the people & businesses who pay into them should get a refund. How about those apples?

    We are already the highest taxed people in our county. And now they want to try and pass a litter tax and real estate transfer tax (RETT) on us in November, increasing the RETT from 0.7% to 1.0%. That is a 43% increase folks! And for many of us, our homes/mortgages are still underwater. Again, how do you like those apples?

    After “shelving/hiding” the previous five-year plan, the City hired an outside consultant to generate a new one. For those of you unfamiliar with this new plan, which was presented to the City Council on Dec 15, 2015, you can get a copy of it here:


    Go to Item D-1 on the agenda, click on it, and links to three pdf files will appear on the right-hand side of the screen. The consultant’s presentation is the 3rd pdf file.

    I strongly encourage everyone to review it, paying particular attention to pages: 22-25, 28-36, and 38.

    Historically, the City has not had a General Fund balance/reserve any where close to $16.8MM to $17.1MM for years. So please bear that in mind when you look at the “minimum” debt by year 2021 on pages 23 and 25, and know that it will very likely be higher than $23MM or even $35MM. With a $10MM General Fund balance/reserve, it would be closer to $30MM – $42MM deficit.

    And some of the anticipated one-time revenues ($17.9MM) that the City is counting on have:
    1) already been factored into the FY2015/16 analysis (JPA Reserve Distribution = Recyclemore, of which $700K has already been used and $1.5MM is currently balancing this year’s General Fund/Reserve), or
    2) are precarious (Terminal 1).

    The City has had a chronic OVER-SPENDING problem for YEARS. To address it, they have relied on taking on additional debt (e.g., a Jan 2015 swaption to balance FY2014/15 budget), significant and never-ending taxation of its citizens, and Chevron. There is only so much blood in us; sticking more leeches on us is simply going to result in their starvation; there isn’t any more blood running through the veins of this City’s already over-taxed citizens. The middle-class simply cannot continue to bear the brunt of this City’s woeful mismanagement. Enough is enough!

    It is also not up to the residents of this City to tell them where to make cuts, so please don’t fall for that or their scare tactics.

    Some of us have been repeatedly asking for a long overdue, external audit of their own departments and staff. Sadly, the City had a chance again this past Tuesday evening to try and implement this. Councilmembers Pimplé and Bates requested an outside firm conduct a full audit of the city organization, including improvement and efficiencies in delivery of services, staffing levels, and cost per unit of services. This request was reviewed the SAME evening, 4/26/16, that the consultant gave an update to his Dec 15th, five-year analysis; see the title of this post for the key headline of that update. Note, the City has also failed to post the consultant’s five-year update on the City’s SIRE website.

    Rather than spend the $300-500K that Bill Lindsay thinks would be needed to do this properly, some of our City representatives would rather spend our tax payer $ on some significantly less-pressing matters. One excuse given was that the results would not be back in time to shape the FY2016/17 budget by June. However, that is a ONE-YEAR budget. The results of such an audit would clearly identify improvements and efficiencies that could be implemented within the FY2016/17 timeframe. But no, let’s just continue to punt the can further down the road. Until when? They keep punting it, and punting it, and punting it. And what has the result been – a debt that has & continues to spiral out of control and one which some truly refuse to properly address. But I guess some are content continuing to come back to all of us asking for more taxes rather than doing the job they were elected and hired to do. We deserve better….so much better.

    Leisa | Apr 29th, 2016
  4. I stand corrected – the City has now proposed to increase the Real Estate Transfer Tax from 0.7% to 1.5%, not 1%. That is a 114% increase folks and they will seek to put this on the November ballot. JUST SAY NO!!!

    Leisa | Apr 29th, 2016
  5. […] is in a tough place. It’s been facing budget deficits for years. Last year Moody’s downgraded Richmond’s bond […]

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About the Author

Mike Aldax is the editor of the Richmond Standard. He has 13 years of journalism experience, most recently as a reporter for the San Francisco Examiner. He previously held roles as reporter and editor at Bay City News, Napa Valley Register, Garden Island Newspaper in Kaua’i, and the Queens Courier in New York City.