Richmond City Council agreed Tuesday afternoon to use an estimated $19 million budget surplus to fund employee retirement benefits, an equity study and a pandemic reserve fund.
Mayor Levar Stoney’s administration proposed, and City Council agreed, to take $5 million off the top for city employee retirement benefits. At an October 12 meeting, Finance Director John Wack told City Council that retirement benefits have been underfunded each year since 2015. By council policy, 90% of the remaining $14 million automatically goes to the city’s rainy day and capital maintenance funds. That left approximately $1.4 million for City Council to allocate.
Ultimately, they decided to appropriate up to $110,000 for an equity study, $500,000 for potential coronavirus relief and nearly $800,000 in additional employee benefits funding. City Council rejected Stoney’s proposal to spend $500,000 on various health equity programs, including gun violence prevention and a mental health support pilot program.
At a press conference last month, Stoney said the programs he proposed would move the city beyond just reacting to the health disparities faced by communities of color.
“In Richmond, the pandemic has hurt us all,” he said. “But some, due to systemic oppression, racism, have borne the brunt, namely our Black, Latino, immigrant and LGBTQ+ Richmonders.”
Some City Council members, however, expressed concerns about providing one-time funding for these programs without a long-term plan for sustaining them. The programs would have been run out of the Richmond City Health District.
Richmond began the pandemic believing it may need to draw more than $6 million from its rainy day savings to offset decreased tax revenue. That changed in August, when Stoney administration officials began projecting a surplus of over $4.7 million. That surplus steadily increased to the now estimated $19 million.
Stoney has attributed the surplus, in part, to hiring and spending freezes and conservative revenue projections.
“This projected surplus was made possible by channeling fiscal responsibility, by neither over-correcting nor under-reacting,” Stoney said at a press conference in August.
A final accounting of the FY2020 budget, which ran from July 1, 2019 through June 30, 2020, is expected to be completed next month.
