Vithoulkas takes over as county manager
On Jan. 16, Henrico County welcomed its new county manager, John Vithoulkas, to office. Vithoulkas replaces Virgil Hazelett, who retired this month following a 21-year stint in the position, during which he oversaw tremendous growth in the county and help solidify and strengthen its sparkling financial status.
Vithoulkas, who has spent 16 years as a county employee, most recently served as deputy county manager for administration. His family moved to the United States from Greece when he was an infant, and he has spent the majority of his life as a Henrico resident. Vithoulkas is a graduate of J.R. Tucker High School and VCU. Recently, he sat down with Citizen Publisher Tom Lappas to discuss his new position, challenges facing Henrico County and his philosophy on managing a county that is still flourishing despite the economic downturn.
Henrico Citizen: “Henrico County Manager John Vithoulkas” – What goes through your mind when you hear that? How does that resonate with you?
John Vithoulkas – This is the eighth time that Henrico County has appointed a county manager, going back to 1934. So there is a true sense of stability that we've achieved as a local government. That stability resonates with me and is truly one of the reasons that we are who we are as a locality. We have had a stable local government on the administrative side for many, many years.
HC: How did you get to this point?
Vithoulkas: I've been fortunate in that the past 16 years that I've been with the county, I've largely been involved with the financial side of the house. I've been the CFO, if you will, for the county for a number of years. Going forward, I think many of the concerns that will be present at the local government level will be financial in nature. When you look at Henrico County and you stack it up against other local governments in the commonwealth and in the nation, what you'll find is that you have one of the lowest tax rate localities in the state and nation, one of the lowest-cost localities, as far as what it costs to provide the average service. I'm very proud of the efforts that have been undertaken thus far. My previous position as the director of finance for the county, I think that's put me in a position to be able to help navigate some of the difficulties that we will face as a county.
HC: It’s fair to say that a lot of what you accomplished in that position is why you were named county manager. Henrico has not had to lay off any employees or cut services during this economic downturn; how much longer can that last?
Vithoulkas: The county has not had to reduce services, resort to layoffs or increase taxes since the difficulty began in 2008. That has been kind of the mantra. It's something that is altogether unusual, when you look at other local governments. We have been able to, to date, reduce the budget or absorb costs that exceed $91 million. Early on, we were able to put a number of work groups together to identify immediate cost-savings. In the last economic run-up. . . we limited our expense growth to a maximum of 5 percent per year. So as we went into this recession, we were better positioned than most, and that helped initially. But as this economic difficulty has continued, we have taken multiple approaches to reducing costs. We formed these employee teams. We have undertaken an effort that we've labeled "Changing the Way Henrico Does Business." We have involved willingly our School Board, who has also participated in these efforts becuase schools represents just under 55 percent of the General Fund budget. What we are facing going forward as of today is another shortfall of $18.5 million going into next year's budget. It gets more difficult the longer you go. That $18.5 million will result in cuts or reductions that exceed $115 million in five years, and that is a significant number. We are working on a number of budget scenarios. We won't take just one approach when it comes to our fiscal affairs.
HC: Will this year's budget prove to be the most difficult one ever for Henrico County?
Vithoulkas: Cumulatively, this will be the hardest budget. Last year's budget was the hardest budget. And then the budget the year before was the hardest budget, and so on. The first couple of years when we went into this having those budget caps in place, that was a significant step as far as protecting the financial house of the county. While we have not eliminated or laid off positions, Henrico County is operating today with 320 vacant positions. There are some positions that ultimately have to be filled, because . . . we're in the business of delivering services, so we must deliver services that our residents expect. And not only that – we must deliver the best services that we possibly can. There's something called the Henrico way that we talk about internally. Each and every time a citizen interacts with Henrico County – whether it's in a library, whether it's in the Department of Finance, whether it's someone that comes in and gets a building permit – if we can meet that customer's needs in the most effective manner, i.e., have that person come in and obtain what it is that they want and do so in a positive way and have that customer leave having a positive interaction with their local government, then that is the Henrico way. That is something that must occur whether the economy is booming or not. That is the least common denominator of who we are. And it's the least common denominator of who we will be going forward.
HC: You are replacing Virgil Hazelett, a man who has been ranked several times as the most powerful person in Metro Richmond. You are someone who prefers a behind-the-scenes role. Do you have to change how you operate now that you are in a highly visible position, or do you continue with your own style?
Vithoulkas: The advantage that I have going into this position versus other managers or administrators that go into positions like this is that I am walking on solid ground. We have a solid base in Henrico, as far as the systems that are in place. When it comes to personal rankings, I have preferred my whole career to be a team player, a team member, a behind-the-scenes type of person. I am driven by a humility that is at my core, and that's not going to change regardless of my position or interactions at the regional level with other administrators. I know all the other administrators. I actually worked for Jay Steigmaier, who's Chesterfield's administrator, for a number of years, early in my career. When I was in college, I interned with the City of Richmond and know many of those folks. Hanover County we speak to very frequently and we're very close with. All of those are are personal relationships. When it comes to our whole region, I think the approach is that we can all learn from each other.
HC: In the past five years, the six highest-ranking appointed county officials (the county manager and five deputy county managers) have retired. Do you view that as a negative, given the tremendous
institutional knowledge that left with them, or as a positive, in that this new team brings its own experience and perhaps a slightly different outlook?
Vithoulkas: There's always a fear of change in organizations – it's a natural thing. We had a group [of deputy county managers] that had worked for the county for 30, 35, 40 years, and within a 24-month period they all had reached the age where they wanted to retire and started to do so. Ultimately what we've done – and this is part of Henrico's success – is that we are continuously bringing up folks within our ranks. Three of the four deputies have come from within. These are folks that, as opposed to having 40 or 35 years experience, have 15, 20, 25 years of experience. They are very seasoned employees and very well-regarded by the work force. The fourth deputy who has recently been hired [Joe Casey] has many years with Hanover County and is . . . very highly regarded throughout the state. I'm very excited about this group. I could not be more pleased. When I say I am on solid ground, that solid ground has occurred [in large part] because of the environment that Virgil Hazelett put together so that we could find ourselves in a position where we could hire from within. There are going to be. . . financial challenges and other challenges that we have moving forward, but I feel very strongly that this team will be able to respond accordingly and will always at its core be able to focus back and remember the customer.
HC: What is the one takeaway from your years working with Virgil Hazelett that you will bring with you into this job?
Vithoulkas: The one takeaway would be that everything matters. It's not that one thing matters, it's that everything matters. I'll give you an example. I was coming back from lunch with Virgil one day, and we were walking in a hallway, and there was a fleck of paper on the floor. And this man, who is in his mid- to late-60s, who has had back surgery and who has so much metal in his back . . . stops and without hesitation bends over and picks up that fleck of paper. When we talk about the Henrico way, that is what the Henrico way is. That's the
least common denominator. Going forward, that is the premise that has to be abided by. we have to remember that. I think that's part of the reason for our success as far as stability. There is a culture within this organization. We understand that. Not only do we understand it, but we abide by it.
HC: You are the first Henrico County manager who is not also a professional engineer, so I have to ask: Are you at least an amateur engineer? Was there any requirement in your contract that you take an
Vithoulkas: (Laughter) There was no requirement built in that I be an engineer, but if it makes you feel better, I have two brothers that are engineers, and my dad was a machinist and I grew up in a garage.
HC: The county has petitioned the General Assembly for the authority to implement a meals tax. Why is that critical, and how important is it for this to be approved?
Vithoulkas: The meals tax discussion has come about because after having made budgetary reductions and absorbed costs in excess of $91 million with another $18.5 million to go, it is extremely difficult to be able to maintain services at levels that our residents expect, quite frankly. So the discussion that led to the meals tax [idea] was predicated on a number of facts. First, Henrico County is the only locality in the commonwealth of Virginia that maintains its own roads that does not have this revenue source. There are over 200 localities in the commonwealth – cities, counties and towns – that have a meals tax. Nobody, nobody in this government has been an advocate for new taxes or fees. That's one thing I think you'll see if you look at our budgets from year to year. We just do not propose a fee for this and a fee for that. The meals tax appeals because of Henrico's demographics, i.e. our business climate, our business travelers and sports tourism that is occurring more and more here in the county. We believe that 40 percent of the meals tax would come from out of town, and that is fairly conservative estimate. If we are in a position where we have to look at something like a real estate tax [increase], 100 percent of the real estate tax comes from our businesses and our residents. So the thought is, let's see if we can have a community conversation. The only way to get a meals tax as a county. . . is by having a referendum or if granted the right by the General Assembly. The question that we have put to our legislators is, Can we have a community discussion and show our community, 'This is the reason that we have put this meals tax question out there.' And after this community conversation with a unanimous vote of the board, then proceed with a meals tax. A meals tax is not something that you can impose overnight. It would require significant implementation conversations and communication with businesses. You're looking at at least a six-month lag even if there was an affirmative vote.
HC: Is there a defining issue that you feel is going to take precedence in the county during the next decade, whether it’s tourism, development in Eastern Henrico, transportation issues or something else?
Vithoulkas: Most of the issues that we will face will have this fiscal undertone. I would safely say [for] the next five years. . . our fiscal environment will be difficult. The difficulty with the federal government obviously has implications for Henrico and basically all levels of government. In the past 10, 12 years, local governments have had challenges with the state. You have state legislators who have wanted to reduce taxes as a policy [issue]. The taxes that they have chosen to reduce more often than not have actually been local taxes. That presents difficulty, because. . . while we have year-to-year budgets, our fiscal affairs are many years into the future. So we are consistently planning 5, 10, 15 years out into the future. Not being able to rely on resources that you have today for tomorrow will present a challenge.
In Henrico County, we are becoming more urban. When I grew up in Henrico, the West End was West End Drive, and there wasn't much beyond that. We have seen many changes, and those changes will continue. We have more businesses, more residents, more people that will continue to choose to live in Henrico. I am a first-generation immigrant. We are becoming more multi-cultural. There are so many opportunities that we have within that realm. When you take our increasing and increasingly diverse population, and you look at what that means as far as service demands, our infrastructure will present probably our single largest challenge going forward. That is infrastructure as far as schools, it is infrastructure as far as utilities, it's infrastructure as far as public safety, fire stations, police precincts, it's infrastructure as far as recreational areas.
Quality of life is not one-dimensional – it's not a library, it's not a park – it's all of these things that we have worked as a community for many years to develop. And it's also transportation, it is roads. Another thing that sets us apart is that you have a county of 244 square miles and within this 244 square miles, you have the third largest road network in the state of Virginia. The point is that you can get from Point A to Point B in this county, whether it's in the East End, West End, what have you. That is a huge convenience to our residents, but it's also one of the reasons that businesses choose to migrate here.
So there will be challenges. All of this within the backdrop of a likely difficult fiscal period of time. Our county is now going on 402 years of history. In those 402 years of history, people that have walked this soil before us have had challenges that were significantly harder than the ones we're facing now and will face. So with that perspective, I have a lot of hope. I am a father of three. I am a believer in our school system and the services that we offer. I have spent most of my life within Henrico. I think the best for Henrico is yet to come because the generations that come even after me, I am truly excited about those generations. As a parent, I've seen firsthand what not only our school system has been able to do, but how these kids now, how they all get it as far as community goes.
HC: Will there be a bond referendum in the near future?
Vithoulkas: There will be a bond referendum at some point. The responsibility that we have as the steward's of the public's resources is that we cannot put forward false hope. Credibility for Henrico has always been a mantra. Our financial house has always had that rock-solid backdrop. In the past five years, we have actually had less capacity to issue debt than we had prior to 2008. So going forward, things will start to change, things will start to improve. We will look at that when the economy improves. I can't give you a year. I can tell you it won't be this year and it won't be next year, based on what we are seeing as far as our financials.
HC: Are there any specific programs or efforts that you hope to implement in this new position?
Vithoulkas: I come into this position focused on the customer, and that is my backdrop. I am personally driven by service. I believe that one of the biggest mistakes that local governments can make is to lose focus of what is important. From the management side, what is important is the citizen and meeting the service delivery needs of the citizen. So, there is no and will not be any, 'Let's have a 10-point plan.' You just won't see that. My focus, near term, is entirely on meeting the budgetary challenges and longer-term, getting to the point where we can once again make enhancements to our infrastructure, i.e., at some point coming forward with the bond referendum.
HC: What do you view as the greatest strength of Henrico County?
Vithoulkas: Our residents. I see that over and over again, and I see it when I leave and I go away. Henrico is home. When my parents emigrated to this nation, we lived in New York City. I have been back to New York City to visit relatives. If you run into a person at Regency Square and you have a questions, you'll get an answer and a 'Have a nice day.' If you ask someone in New York City a question, not only do you not get an answer, but . . . well, it's just a different environment. Henrico County is a great place to live, to raise a family. There's a quality of life that we have here that I don't believe we see until we leave here and come back. To me, there is no other place like Henrico County. And what makes it special is the residents that are here.
HC: What is your passion away from work?
Vithoulkas: My family. I've got 16-year-old twins, a boy and girl, and I've got a 12-year-old son. I married my high-school sweetheart. We've been very fortunate in that we are a close family. My parents are still here. [His wife] Jenny's mom is here. We have a big support system within the community. I feel like when I go home. . . I have the ability to decompress and really be myself. I have learned more, I think, from being a parent about leadership and life than from any other aspect. When you become a parent, you are able to go from focusing on self to focusing on others, and that's what it's all about.
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