By Kathy Chouteau
Richmond’s financial condition remains stable due to a still-hot economy and greater fiscal discipline, unemployment in the city has reached its lowest point in history, crime has largely continued its downward trend, construction of housing and industrial warehouses has taken off, and, for the first time in years, plans to construct hotels are underway.
While more needs to be done to keep the city’s bottom line safe, and while crime and illegal dumping continue to be vexing issues for the city’s residents, Richmond Mayor Tom Butt provided an optimistic report in his annual State of the City address on Tuesday.
The mayor’s address examined a wide range of city topics, including economy, housing, public safety, education, transportation and environmental sustainability.
Richmond adopted a balanced budget during FY 2019-2020, its bond ratings are steadily improving, its minimum wage is at $15/hour and the city has the lowest unemployment rate (3 percent) in its history, the mayor said.
“Unemployment has been a chronic and pernicious problem in Richmond for decades, but that cycle has been broken,” he said. “Unemployment rates in Richmond have been dropping for years and reached a historic low of 3 percent in May, September and December of 2019.”
The mayor said strong job growth in the commercial sectors has helped.
“But we must continue focusing on more career opportunities and higher wages,” Butt said.
Bolstering such opportunities in 2019 were the openings of the Richmond Visitors Center at the BART Station, along with the nearby Richmond Food Hall and CoBiz Richmond, which was launched with funding from Chevron’s eQuip Richmond Initiative.
Despite the progress, the mayor noted that “our two primary revenue sources—sales and property taxes—continue to grow but not enough to keep up with city expenses.” One challenge is meeting the cash reserves minimum fund balance of 15 percent.
“We’re $7.1 million behind the target balance of $26.4 million,” said Mayor Butt.
Another challenge is keeping up with rising CAlPERS pension and employee benefit costs. The mayor also cautioned that the Kids First program, a voter-approved initiative that requires a percentage of the city’s general fund be set aside for youth programs and services, will start showing a revenue deficit as early as 2023.
Richmond should see a boost in jobs and local economy from two new hotels under development. A Home2Suites hotel has been approved for development on Meeker Avenue in Marina Bay and a Residence by Marriott hotel is currently under review to come to Hilltop Mall.
Meanwhile, Lifelong Medical Care recently opened the Williams Jenkins Health Center in downtown Richmond, which will also bolster Richmond’s economy.
The mayor additionally noted that the Port of Richmond has seen a six-fold increase in the port’s revenues over the past decade, bringing in nearly $10.4 million dollars.
The city is also undergoing an “industrial warehouse boom,” per the mayor, with three new developments on the horizon: 912 Harbour Way South; Point Pinole Business Park Phase III (Building 1); and Amazon’s Atlas Road warehouse. They’re a “welcome addition to the local economy and workforce,” he said.
While crime is down, it’s still “the number one concern for Richmond residents,” Mayor Butt said, citing community surveys. While in 2019 there were the same number of homicides (17) as in 2018, robberies were down 21 percent, burglaries were down 17 percent and the number of stolen vehicles decreased 22 percent. Unfortunately, sexual assaults rose 12 percent at 89 in 2019, up from 77 in 2018.
The mayor highlighted that in 2019, the Richmond Police Department made more than 200 DUI arrests, while the Office of Neighborhood Safety “continues to prevent shootings that can lead to more killings.”
The city is finding new ways for residents to travel that have removed some cars off congested highways. The mayor highlighted the successful Richmond Ferry that launched early last year. The service averages 728 passengers per weekday and drew over 200,000 passengers in 2019. Ridership exceeded expectations to the point that a pilot program was launched to provide weekend service from August to October. The weekend pilot drew 536 passengers per weekend day and will be repeated again this year.
Another highlight last year was the opening of the Richmond San Rafael Bike/Pedestrian Path in November 2019 to much fanfare, according to the mayor.
Still, the numbers of public transit usage remains low. Currently, 18 percent of residents carpool, while 14 percent use public transportation and 60 percent drive alone. The City and BART are looking for ways to work together to improve the Richmond Station to attract more public transit users, he said.
Illegal dumping remains a major problem in the city. According to the mayor, more than 5,000 items were picked up in Republic Services’ Bulky Item Pickup Program but the problem seems to be getting worse.
“You can do your part with ‘I Heart Richmond,’” said the mayor, which he said is “a new initiative to help eliminate illegal dumping in our community. Staff will be rolling our citywide PSAs about illegal dumping, improving coordination between city departments, and making the abatement and reporting process more efficient.” Mayor Butt also said that the City will be working closely with the District Attorney to prosecute illegal dumping.
Housing and homelessness remains among the city’s most pressing challenges, the mayor said.
After nearly two decades of stagnation, new housing construction has taken off to the point that the city has a decent chance of meeting its mandated goals for housing needs by 2023, Mayor Butt said.
“Richmond is a Bay Area leader in providing low cost housing,” said the mayor, underscoring that there are early 3,300 contractually affordable units and 25 multifamily housing developments mostly in the downtown area. In 2019, the city approved 92 Accessory Dwelling Units (ADUs), which has helped. He also promoted the possibility of a development at Point Molate with 70 affordable housing units included (opponents have filed a lawsuit to challenge the development plan).
Also, the transition of public housing to private sector managers, as well as handing off the Section 8 program to the County, will cut the city’s financial losses and enhance services to over 4,000 residents, reported the mayor.
Rents in the city decreased by 8.1 percent to $2,160 in the last year, the mayor said, citing an East Bay Times report. Compared to the rest of the Bay Area “Richmond remains a regional bargain,” Butt said.
Meanwhile, the Richmond Rent Program, stemming from a rent control and just cause eviction policy passed in 2017, continues to staff up, and increased its budget to $2.24 million, the mayor said, noting that the program is having difficulty collecting fees from covered landlords, with only 77 percent of fees collected in 2019.
In terms of residential real estate in Richmond, the market “continues to lean in favor of sellers,” said Mayor Butt.
“The median home value in Richmond is currently $532,000, considerably more affordable than neighboring cities and the vast majority of the Bay Area,” he said.
Although home values in the city took a very slight dip in 2019 (-1.2 percent), the forecast is for a 4.1 percent increase in values this year.
“Increasing values raise tax revenues and translate into improved and expanded city services,” said the mayor.
Despite positive reflections on housing, city officials have eported significant spikes in homeless encampments in the city, a Bay Area-wide problem. The mayor noted that Contra Costa County has offered $500,000 for Richmond to establish a Safe Parking Village for homeless individuals living temporarily in vehicles.
Education/Quality of Life
In terms of education, one standout highlight was that the Richmond Promise, launched by a $35 million Chevron Richmond investment in partnership with the city, will see its first cohort of scholars graduate in 2020.
“Over three-plus years, the Promise has grown to support over 1,200 scholars with $56.4 million scholarship dollars,” he said, adding that “70 percent of scholars persist in college.”
In recent years, overall image and quality of life ratings have improved dramatically, the mayor said, “we are up in every category.”
In terms of renewable energy and efficiency, the city had 325 solar installations in 2019. The mayor also noted that, last week, City Council passed a first reading of an ordinance that phases out the use of natural gas in new buildings. He also highlighted the City’s amendment to the Integrated Pest Management Ordinance that bans the use of pesticides on city property and bans products containing glyphosate.
In addition, the mayor touched on the City’s partnership with Groundwork Richmond and environmental consultant, Rambull, which was awarded a grant from the California Air Resources Board to deploy air monitoring sensors throughout the Richmond community. It “will result in an action plan to reduce air pollution and exposure,” the mayor said.
“Richmond continues to be a leader in sustainability and has received many awards for being out front when it comes to climate change and resilience,” he said. He added that “we are trending in the right direction but probably short of our goals” and directed residents to visit the city’s website to see Richmond’s progress.
During his State of the City, Mayor Butt honored distinguished guests in the city, including members of the 2019 Salesian High School football team who brought home the first football state championship in the history of Richmond; students from the first cohort of Richmond Promise scholars who will be graduating from college this spring; the co-owners of Armistice Brewing Company; Kaliyah Dandy Evans, a high school senior and Richmond resident who was featured in the 2020 Rose Bowl Parade; and East Brother Beer’s co-owners for winning a silver medal at the Great American Beer Festival.
To watch Mayor Butt’s State of the City address, click here.