E-Mail Forum
  Richmond's Finances Headed in the Right Direction
March 26, 2012

Richmond's finances headed in right direction
By Robert Rogers
For the Contra Costa Times
Posted:   03/26/2012 12:00:00 AM PDT

City leaders heard plenty of good news in Richmond's midyear budget review, but the cloud of uncertainty looms large.
In his presentation on the budget at last week's City Council meeting, Finance Director James Goins said Richmond's municipal budget was healthy, despite continued trouble at the state and federal level. City coffers have been bolstered by stabilization in local housing, upticks in retail sales, reduced unemployment and revenues that continue to climb back from 2009-10 levels.
"We are trending in the right direction," Goins said.
But City Manager Bill Lindsay, speaking after Goins' report, told city leaders and residents that an uncertain fiscal environment remains the norm.
"I really want to caution the council that this is a very precarious time," Lindsay said.
Among the unknowns is a property tax appeal by Chevron Corp., the city's biggest taxpayer, which is suing Contra Costa County for what its lawyers say are unfairly high property assessments.
Lindsay said Tuesday the city has not yet developed a plan of action in response to a potential legal judgment in Chevron's favor -- which could cost the city millions.
"It would be severe," Lindsay said. "We do not have a contingency plan for that."
The city's $132 million-plus fiscal year general fund budget, which runs from July 1, 2011, to June 30, 2012, has benefited from increased sales, utility and property tax revenues over last year
according to the city's report. Overall, general fund revenues are expected to grow 5.7 percent over fiscal year 2010-11.
"The big take-away is we have a balanced budget and adequate reserves," Councilman Tom Butt said Friday. "We're in good shape, but we made a lot of cuts the last couple years to get here. We have to continue to be prudent, it's tight."
The city has had to draw down its reserve fund in recent years and reduce city staff because of the strain on revenues. The reserve fund stands at about $11 million, near the low end of the city's policy of maintaining it at 7 percent to 15 percent of expenditures. Lindsay said the city's non-public-safety workforce is down 15 percent from a few years ago.
Despite improvements in property taxes over last year, the city's budget is still strained in the aftermath of the housing meltdown that began in late 2006.
"Property tax has come back a little bit, but not even snipping at the levels they were several years ago," Lindsay said.
Councilman Nat Bates said Friday he is concerned with the loss of state redevelopment funds -- which state leaders voted last year to ax -- and the city's predicament should Chevron Corp. win its appeal. Bates said about 20 redevelopment employees may lose their jobs if they can't be absorbed in other departments.
"All departments are subject to review depending on what happens with our revenue," Bates said. "Recreation, parks and library services are often the first to get hit."
Hammering out the details of the next fiscal year budget, which begins July 1, is expected to continue during public meetings into the summer.
Lindsay said city staff will present the council with a proposed budget in May.