Vithoulkas proposes $1.1B budget
No layoffs recommended, but meals tax encouraged as new revenue source
UPDATED: 9:02 P.M. – Henrico County Manager John Vithoulkas tonight proposed to the Board of Supervisors a $1.1 operating and capital budget for Fiscal Year 2013-14 – a 9 percent reduction from the current budget.
Vithoulkas's proposal would not lay off any employees or raise the county's real estate tax, but it does suggest a public referendum on a 4-cent meals tax, which could raise an estimated $18 million annually – money that would be dedicated for education costs.
For the fourth time in the past five years, the budget also does not provide pay raises for county employees.
Vithoulkas painted a bleak picture at times during his presentation, warning the board that Henrico faces an $18.5-million budget shortfall in FY13-14 and fixed cost increases of another $33 million or more the following year, with $21 million of the latter amount attributable to education. Henrico also expects to inherit more than $500 million in budgetary liabilities from the Virginia Retirement System in the near future, as a result of underfunding by the General Assembly and its subsequent decision to pass those liabilities to localities.
"My job as your county manager is to sound a warning when difficulty lies ahead," he said.
Vithoulkas told the board that he never considered recommending a real estate tax increase to offset rising costs and declining revenues. The county's rate of 87 cents per $100 of assessed value is the lowest among Virginia's 13 largest localities and gives Henrico a key advantage in attracting new development projects, he said.
"This is our history. This is a cornerstone of our economic development success, and it is something that cannot be ignored," he said of the rate.
The real estate tax has been reduced six times in the past 35 years but never increased during that time. Vithoulkas suggested that increasing it now also could make the county too dependent upon one source of revenue, whereas implementing a meals tax would provide a new source.
County officials have estimated that 40 percent of the money collected by a meals tax would come from non-Henrico residents. But opponents of the idea already have begun expressing opposition to the idea, claiming that it would harm Henrico restaurants and other food service businesses.
During a presentation Monday night in Varina, Vithoulkas countered that argument by pointing to the fact that food sales in the City of Richmond are outpacing those in Henrico – despite a 6-cent meals tax in the city.
To combat declining revenues – resulting from lower real estate values and reduced state funding – Henrico has taken a number of steps in recent years, Vithoulkas said. It saved $29 million by refinancing all of its $389 million in debt, eliminated 646 vacant positions since FY09-10 and instituted a department-by-department review of all expenditures. In total, pending approval of the FY13-14 budget, the county will have eliminated more than $115 million in spending during the past four years, he said.
But those cuts are not enough to meet rising demands, Vithoulkas said. So his proposed budget proposes some additional cuts and fee increases. Among them:
• reducing the maximum allowable award to participants in the Real Estate Advantage Program (REAP) to $1,500 (from $3,000);
• eliminating the Recreation and Parks "Summer Blast" program (saving $300,000);
• increasing the building inspection permit fee to help make the program more self-sustaining (currently, fees pay only 54 percent of its expenses, but the fee increase would bump that percentage up to 71);
• increasing the water and sewer user fee by 5 percent.
The proposed capital budget (used for infrastructure projects) of $6.85 million would be Henrico's smallest such budget in more than 50 years but is necessary in order to help stabilize its cash reserve fund, Vithoulkas said. That fund has declined from a peak of $252.55 million in FY09 to about $190 million this year and is projected to drop to $174.71 million by FY14-15.
In a written report to the board, Vithoulkas warned that the FY14-15 budget will be even more difficult.
"Without new revenues, we must consider the impact of other cost reductions and related services," he wrote. "With more than 76 percent of total General Fund costs meeting Schools and Public Safety requirements, the bulk of all other expenditures are in maintenance, utilities and other costs that have very little flexibility. After $115 million in cost reductions already made, the county has few options outside of service reductions and staff layoffs."
And even layoffs would not create a significant cost savings, he wrote. Laying off 125 teachers, for example, would save only about $6 million – less than a third of the expected $21 million shortfall the school system will face in FY14-15
The Board of Supervisors will conduct a weeklong review of the proposed budget and meet with the directors of every county department next week, before considering adoption of the budget in April.
In Varina, one of the most anticipated events of the season is approaching. The 19th Annual Big Toy Parade will return on Dec 14, offering a “homey,” small-town feel that helps elicit holiday spirit among participants and spectators alike.
The parade, which begins at 3 p.m., is sponsored by the Battlefield Ruritans and Henrico County Parks and Recreation and is held in conjunction with the James River Boat Parade. It is led by a grand marshal along Old Osborne Turnpike and ends at the Osborne Boat Landing, where hundreds of community members gather to await nightfall and the arrival of lighted boats, concluding a festive holiday celebration. > Read more.
Citizen Staff Reports 12/03/2013
The region's two premier youth soccer organizations – the Richmond Kickers and Richmond Strikers – have partnered to create Richmond United, a cost-free U.S. Soccer Development Academy program designed to serve the most talented players in the region. The arrangement marks the first time in U.S. Soccer Development Academy history that two member clubs have united their respective Academy programs.
Slated to begin play in the fall of 2014, Richmond United will field U13/14, U15/16 and U17/18 U.S. Soccer Development Academy teams. The teams will train and play home games at two of the top soccer specific complexes in the nation, Ukrop Park and Striker Park. > Read more.
Photo by Roger Walk for the Henrico Citizen 11/24/2013
Henricus Historical Park has a new, messy guest. Eleanor, a rare five-month-old Tamworth pig, was donated this month to the Chesterfield park by the Chesterfield County Farm Bureau as part of an effort to enhance the living history museum's partnership with the Virginia Foundation for Agriculture in the Classroom. Eleanor and her livestock pig and goat neighbors at the park will be a special attraction for the schoolchildren and others who visit the Henricus Historical Park. Eventually, she will triple from her current 150-pound weight and grow to about two feet tall. > Read more.
Disney’s Frozen shines as an instant classic
Disney has spent the past few years in search of that certain something; that ‘Disney Magic.’ It’s been a slow process. From The Princess and the Frog to Tangled to Wreck-it Ralph, the studio took slow steps, welcoming its princesses and fairy tales and musical numbers back into the fold. Every film was an improvement on the last, but none of them had anywhere near the charm or lasting appeal of the early ‘90s highs of the “Disney Renaissance.”
Frozen, by far, is the House of Mouse’s best attempt at a new Little Mermaid. > Read more.
Holiday events are in full swing this weekend in eastern Henrico! The Henrico Theatre will show the holiday classic “Elf” and the Concert Ballet of Virginia will perform a shortened version of “The Nutcracker” at the Eastern Henrico Recreation Center. On Sunday the North Airport Drive Civic Association’s annual Tree Lighting Ceremony will take place at Fire Station #3. For all our top picks this weekend, click here! > Read more.
Find out how your favorite dining establishments fared during their most recent inspections by the Virginia Department of Health. > Read more.
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