Last week several representatives from City Council finally approached my Administration about resolving the budget "imbroglio." We agreed to look at how we can continue to move forward and had these talks taken place sooner, this matter never would have dragged on as it has.
As you know, I stated on June 10 that the budget Council approved on May 27 was unbalanced and invalid, as the timeline below will demonstrate. As a result and per the City Charter, my original proposed budget took effect. It is unknown why Council took six weeks to come to the table to discuss this matter.
In 2005, when a similar deadline was missed by Council and the City faced a $14 million deficit, previous Council leadership worked diligently from the outset of the budget confusion to avoid needless and costly litigation, and a solution was found. In fact, then-Finance Chairman Pantele mentioned in a Richmond.com article at that time the two sides were not far apart and a resolution was likely.
However, in 2005, negotiations began much sooner and the entire issue was resolved before the budget went into effect on July 1. This year the differences are much narrower, yet the eagerness to discuss these differences has remained absent until now.
As such, my original budget took effect on July 1 and will be the baseline from which future discussions between my staff and Council's staff will take place. Those discussions will begin this week and will seek to identify the differences in the current budget and the one that Council submitted.
As a starting point, we must first identify the $6 million that has to be found to bring the budget into balance with the new tax rate that Council approved in April. After those amendments are adopted, discussions can take place on other items such as text amendments and a retiree Cost of Living Allowance (COLA).
Until last Thursday, the only communication between my office and Council had been their reliance on a predictable advisory legal opinion from their attorney and threats of lawsuits. One Councilman said, "It is very clear to me that if the Mayor can't come to terms and accept the Council's budget, we need to move forward with a lawsuit." Two weeks ago, another Council member said, "If we don't go to court, we'd essentially be agreeing with the Mayor."
Heaven forbid, agreeing with him, on anything?!
It is important for Council and the public to remember that in time to come, working together on a budget is vital no matter who serves as Mayor or who serves on Council. Our actions today will directly affect the future of our City.
However, it is also important to remember how we got here.
As the timeline to the right shows, this entire mess was a case of Council's own making and a failure to heed to its own rules and the rules set forth in the City Charter.
Council had generally agreed on a two-cent reduction in the real estate tax rate in April, but Finance Chair Robertson changed her vote at the last minute at the April 14 Council meeting and the rate was cut three cents.
Each one-cent reduction in the rate equals $2 million in revenue and Council had already identified $4 million in cuts. However, the extra one-cent reduction forced them to find yet another $2 million.
 At the Council Finance Committee meeting just three days later, on April 17, the committee looked to fund that $2 million with money from Ordinances 2008-42 and 2008-89, which contained leftover funds from previous budgets.
You can read the April 17 transcript which clearly states that the money would be used for the 2009 budget to fund the retiree COLA. You can also see that the Finance Chair wanted to continue the paper to get more information on procedure and that a special meeting would likely be necessary "so we can get this to the Council in the month of May."
As you recall, the City Charter requires a balanced budget to be adopted by May 31. Any ordinance providing funds to the budget must be adopted by that date. There was no special meeting before the May 15 Finance Committee meeting, and both ordinances were recommended for approval on May 15 and sent to the full Council on May 27.
Council's own rules, however, do not allow money ordinances to be amended and voted on the same night. Either the Finance Committee Chair or Council's Chief of Staff should have called for a special meeting to expedite those ordinances between May 15 and May 26, so they could be officially adopted by Council on May 27.
Council clearly failed to do this and the ordinances were not approved until June 9, well after the May 31 deadline. Perhaps Council has now seen that a lawsuit would be a pure waste of hundreds of thousands of taxpayer dollars.
This entire affair is a simple case of not turning in homework on time, because Council missed its deadline. As the timeline clearly demonstrates, Council had multiple chances to take corrective action, yet it never happened.
Luckily, the Charter has long spelled out what happens when proper procedure is not followed so there will not be a crisis, and that is exactly what has occurred: the original budget took effect and the City continues to function normally.
Services are being delivered to our citizens; obligations are being met; invoices are getting paid; and we are continuing to make this City better.
My Administration has never sued anyone and will not do so.
The court of public opinion is the most important one, and I hope that Council has heard your voice: you want leadership and solutions from within, and not lawyers and wasteful court fees from without.
My Administration is working hard to move this City in the direction it needs to go. We, together, may finally be on the right path. |
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Q&A From Meeting Friday, July 25
Click here for the video following the private meeting between the Mayor and Council President
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Timeline of a
Missed Deadline
Pre-April 14 - Council's "consensus" is that they will cut the tax rate two cents, thus requiring them to find $4 million to cut from the budget.
April 14 Council Meeting Tax rate is cut three cents, led by Finance Chair Ellen Robertson's last minute vote change. Council was then bound to cut $6 million from the budget as each one-cent reduction in the tax rate equates to $2 million in revenue.
April 17 Finance Committee Meeting - Council looks to Ordinances 2008-89 and 2008-42, to provide $2 million to the 2009 Budget. Ordinances were continued to get clarification from staff. Special meeting suggested. See transcript.
May 15 Finance Committee Meeting - Ordinances 2008-89 and 2008-42 are identified as funding sources for 2009 Budget by Council Chief of Staff. See transcript.
May 27 Council Meeting Ordinances 2008-42 and 2008-89 amended and continued. Rest of budget voted on.
May 31 - Deadline for passing all ordinances providing funding to the budget.
June 9 Council Meeting Ordinances 2008-42 and 2008-89 are finally adopted.
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