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.
Thanks to a first-place win in The American Protege International Vocal Competition 2014, Glen Allen High School student Matija Tomas will travel to New York City to perform at Carnegie Hall in December.
At the first-place winners recital in Weill Hall, Matija will perform Giacomo Puccini’s opera aria, “Chi il bel sogna di doretta.” She will perform with other vocalists from around the world and have the opportunity to win other awards and scholarships.
Locally, Thomas has performed with Richmond’s renowned Glorious Christmas Nights, Christian Youth Theatre, and WEAG’s Urban Gospel Youth Choir. > Read more.
The John Rolfe YMCA and Gayton Baptist Church have partnered in an effort to bring greater health and wellness opportunities to the community.
Through this partnership, the John Rolfe Y will run Youth Winter Sports programs, including basketball and indoor soccer, in Gayton’s newly renovated $5.5 million outreach center that features a new gymnasium, youth and teen space, social space with café, meeting space and full service commercial kitchen. > Read more.
Citizen Staff Reports 09/15/2014
Henricus Historical Park will commemorate its anniversary during Publick Day, a signature annual event that celebrates the establishment of the second successful English settlement in the New World. In September 1611, Sir Thomas Dale, along with soldiers, tradesmen and farmers, ventured from Jamestown to create the Citie of Henricus. Leaders of Henricus developed the first English hospital, chartered the first college in North America, established tobacco as the first cash crop in Virginia, and created a place where Pocahontas lived and met John Rolfe.
Publick Day will take place Saturday, Sept. 20, from 10 a.m. to 5 p.m. Admission is free and parking is $5 per vehicle. > Read more.
Paid extras are being sought to appear in the AMC television series TURN: Washington's Spies, which will begin filming its second season in the Richmond area at the end of September and continue through February.
No experience is required, but producers say that extras must have flexible availability, reliable transportation and a positive attitude.
Arvold Casting is holding an open call on Sunday, Sept. 21 and is seeking men, women and children who are Caucasian, African American and Native American, with thin to average builds and who can realistically portray people living in Revolutionary War times. Long hair is a plus but not a must. > Read more.
TGIF! Celebrate the weekend at Oak Hall Baptist Church’s Community Block Party on Saturday. Learn more about ballroom dancing, art and Colonial times. Or take the kids to Generation Z Games for water play or Southern Season to cook up a Disney-theme meal. For all our top picks this weekend, click here! > Read more.
Check out these three B’s in Henrico this weekend: books, bluegrass and “Born Yesterday.” Other activities to participate in – and feel good about – are the 15th annual James River Regional Cleanup and the 5th annual Richmond Out of the Darkness Community Walk. For all our top picks this weekend, click here! > Read more.
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