Richmond's Bills Are Coming Due. Where's City Hall's Plan?

 

Richmond's administration is warning of future budget shortfalls. Yet the Chief Administrative Officer's budget increased 42.1% in a single year, and the City committed $14.7 million from its Contingency Reserve to the Diamond District.

Meanwhile, questions remain about whether the administration submitted the restoration plan required by City Code for the reserve expenditure.

These decisions may have explanations. Richmond taxpayers deserve to hear them.

Before City Hall asks residents to pay more, shouldn't it explain how it's managing the money it already has?

More Revenue, Less Financial Flexibility

Richmond's General Fund grew from approximately $780 million in fiscal year 2021 to $1.09 billion in fiscal year 2025, an increase of nearly 40%, according to City budget figures.

Yet the administration's October 2026 financial forecast projects a potential $17.3 million shortfall in fiscal year 2028. Under a scenario involving a four-cent reduction in the real estate tax rate, that projected shortfall increases to approximately $35.6 million.

Those are projections, not current deficits.

The City's reported annual General Fund surpluses also tell a concerning story.

Fiscal year	Reported annual surplus
FY2023	$56.3 million
FY2024	$6.1 million
FY2025	$1.8 million

That's a reported decline of approximately 97% in two years.

Inflation, personnel costs, pension obligations, and increased service demands certainly account for some of the financial pressure. And annual surpluses should not be confused with accumulated reserves.

But Richmond also faces approximately $680 million in identified school maintenance needs over the next two decades, infrastructure obligations, and continuing redevelopment commitments.

How does Richmond experience substantial revenue growth and still find itself confronting potential financial trouble?

Sources: City of Richmond annual budget documents and October 2026 fiscal-health forecast; Richmond Public Schools facilities planning materials. Historical surplus figures and forecast assumptions should be checked against the original financial presentation.

A 42% Increase in the CAO's Budget. What Are Taxpayers Getting?

Consider the Chief Administrative Officer's Office.

Richmond's adopted budgets establish the following General Fund appropriations:

Fiscal year	CAO's Office budget
FY2026	$2,704,726
FY2027	$3,843,691
Increase	$1,138,965

That's a 42.1% increase in a single fiscal year.

These aren't estimates. They're figures from Richmond's adopted budgets.

The FY2027 proposed budget also identified an increase from nine to eighteen funded positions within the CAO's Office.

That deserves an explanation.

Were additional positions created, or were existing employees and responsibilities transferred from other departments?

How much of the $1.14 million represents new spending rather than a reorganization of existing costs?

And what measurable improvements should residents expect?

An increase in appropriations doesn't automatically establish waste. But neither does it establish that taxpayers are receiving better services.

When the administration is warning of future financial shortfalls, a 42% increase in its chief administrative office deserves more than a passing explanation.

Sources: City of Richmond, FY2026 Adopted Budget; FY2027 Proposed Annual Fiscal Plan; FY2027 Adopted Budget, ORD. 2026-063.

Competitive Salaries Should Produce Competitive Results

Richmond's executive leadership is well compensated.

Chief Administrative Officer Odie Donald's reported compensation includes a $365,000 annual base salary and $13,500 in deferred compensation.

Mayor Danny Avula received approximately $180,687 in reported 2025 compensation.

Previously reported annual salaries for neighboring chief administrators include approximately $359,007 for Henrico's John Vithoulkas and $390,000 for Chesterfield's Kevin Catlin.

Those figures come from different reporting periods and should not be treated as a uniform-date comparison.

Richmond also operates under a different governmental structure, with both an elected executive mayor and a chief administrative officer.

The surrounding counties have elected governing boards and administrative staffs, but neither maintains a comparable separately elected executive mayor's office.

Comparing salaries alone therefore doesn't establish which locality operates more efficiently.

But the larger question remains.

Are Richmond taxpayers getting their money's worth?

Are residents receiving timely responses from City Hall?

Are basic services improving?

Are major projects being managed effectively?

Is the administration controlling costs and expanding the commercial tax base?

Richmond should pay competitive salaries to attract competent leadership.

But competitive compensation should come with competitive performance.

Sources: Previously reported executive compensation figures and local government salary schedules. Current individual compensation should be confirmed against payroll or employment records.

The Diamond District: Where Is the $14.7 Million Restoration Plan?

Then there's the Diamond District.

On February 23, 2026, City Council adopted ORD. 2026-041, approving the transfer of $14.7 million from Richmond's Contingency Reserve to support the Economic Development Authority's acquisition of the Sports Backers property.

The arrangement was structured as a loan, with repayment expected from future Diamond District property sales.

The City's supporting memorandum explains that the property acquisition was contemplated in the May 2024 development agreement.

But the controversy extends beyond whether Richmond expects to recover its money.

Did the administration comply with the City's financial safeguards governing the use of reserve funds?

What Does City Code Require?

Richmond City Code § 12-263 governs the Budget and Revenue Stabilization Contingency Reserve.

The provision restricts reserve appropriations to circumstances involving catastrophic, unforeseen, or unavoidable events that result in reduced revenues or increased expenditures.

It also requires the mayor to submit a restoration plan to City Council within 90 days after reserve funds are expended, with a three-year restoration framework.

The provision refers to restoring the unassigned fund balance, a wording distinction that may affect its application to this transaction.

Nevertheless, the question is straightforward.

Where is Mayor Avula's 90-day restoration plan?

As of October 30, 2026, I have not located a publicly available plan demonstrating compliance with that requirement.

That doesn't prove the City failed to submit one.

The actual disbursement date must also be established because the 90-day period runs from expenditure, not simply Council's authorization.

But the administration should be able to identify the disbursement date, produce any required plan, or explain why it believes the provision doesn't apply.

Was This an Appropriate Use of the Reserve?

The Sports Backers property acquisition was contemplated nearly two years before City Council approved the transfer.

That raises another legitimate question.

Was a previously planned redevelopment expense an appropriate use of money reserved for catastrophic, unforeseen, or unavoidable financial circumstances?

The administration may argue that the funding obligation became unavoidable, even though the acquisition itself was anticipated.

If so, that explanation should be documented.

City Council approved the transfer by an 8–1 vote, satisfying the Charter's six-vote threshold for contingency appropriations.

But legislative authorization doesn't necessarily resolve every question concerning compliance with the City's reserve policy.

And When Will Richmond Get Its Money Back?

The supporting materials for ORD. 2026-041 included a draft promissory note contemplating repayment from future property sales, with a final maturity date of December 31, 2036.

Those were proposed terms. The executed agreement and any amendments must be examined before treating them as final.

Still, the potential gap between a long-term loan and a three-year reserve-restoration framework deserves attention.

What happens if the anticipated property sales are delayed?

What happens if the proceeds are insufficient?

And how will the City restore its reserve funds if repayment takes longer than expected?

The administration has defended the transaction on the basis that the promissory note remains a City asset.

But an amount owed to Richmond is not necessarily the same as cash immediately available for an emergency.

A promise of repayment isn't the same as having $14.7 million back in the City's account.

City Hall should publicly disclose the disbursement date, executed loan agreement, repayment schedule, and any required restoration plan.

If the administration believes the transaction complies with City Code through a particular accounting or legal interpretation, it should explain that conclusion.

Taxpayers shouldn't have to guess whether the City followed its own rules.

Sources: Richmond City Council, ORD. 2026-041, adopted February 23, 2026, including the supporting memorandum and draft promissory note; Richmond City Code § 12-263; Richmond City Charter § 6.16.

Where Is Richmond's Economic Development Strategy?

For all the attention given to the Diamond District, the Coliseum, and other redevelopment proposals, Richmond still needs a broader economic development strategy.

One focused on attracting businesses, expanding the commercial tax base, creating jobs, and generating sustainable revenue.

Major redevelopment projects may contribute to economic growth.

But they aren't substitutes for a comprehensive economic development plan.

Richmond cannot continue placing increasing pressure on residential property taxpayers while its financial commitments grow.

Nor can it overlook the needs of its schools, infrastructure, and basic municipal services.

Is Richmond investing in what the City needs most, or simply moving from one expensive project to another?

And where is the evidence that the administration's priorities will improve Richmond's long-term financial position?

A Financial Forecast Is Not a Financial Plan

In October, CAO Donald presented City Council with a fiscal-health framework outlining Richmond's financial challenges.

Identifying those challenges is important.

But identifying problems isn't the same as solving them.

Mayor Avula and CAO Donald should present City Council and the public with a financial plan that includes:

1. Spending controls: Specific administrative efficiencies, spending reductions, and projected savings.

2. Executive accountability: A complete explanation of the 42.1% CAO budget increase, including staffing changes and transferred responsibilities.

3. Economic development: Measurable initiatives to expand Richmond's commercial tax base.

4. Diamond District repayment: The actual disbursement date, executed loan agreement, repayment schedule, and any legally required reserve-restoration plan.

5. Long-term financial stability: A timetable for addressing the projected FY2028 shortfall, with regular public progress reports.

City Council should establish a deadline for receiving that plan and require the administration to report publicly on its implementation.

Council should also determine whether the Diamond District reserve transfer complied with City Code § 12-263.

These aren't extraordinary demands.

They're basic elements of responsible financial management.

Mayor Avula inherited many of Richmond's challenges. That's true.

But he is now responsible for leading the administration charged with addressing them.

Donald is responsible for managing the City's operations.

And City Council is responsible for meaningful financial oversight.

Accountability requires more than acknowledging that a problem exists. It requires a plan, measurable results, and consequences when commitments aren't met.

Richmond Needs Answers, Not Another Presentation

Richmond's projected FY2028 shortfall isn't an actual deficit today. The City still has time to make adjustments.

But the warning signs deserve attention.

General Fund revenue has increased substantially.

The City's reported annual surplus has declined.

The CAO's Office budget increased $1.14 million, or 42.1%, in a single fiscal year.

And a $14.7 million Diamond District reserve transfer depends on future transactions for repayment, while compliance with the City's restoration-plan requirement remains publicly unverified.

None of these facts, standing alone, proves financial mismanagement.

Taken together, they raise serious questions about Richmond's spending priorities, financial planning, and administrative accountability.

Taxpayers aren't demanding miracles.

They're asking for competent management, reasonable spending discipline, transparency, and a financial plan that makes sense.

Before City Hall asks Richmond residents to pay more, it should demonstrate that it's managing what it already receives.

And before the administration assures residents that the Diamond District money will be repaid, it should explain whether it followed the rules governing that money.

Richmond's bills are coming due. Where's City Hall's plan?

Brian K. Telfair | Publisher | The Richmond Chronicle

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Sources and Supporting Documents

1. City of Richmond, FY2026 Adopted Budget. General Fund and CAO's Office appropriations. City budget documents.

2. City of Richmond, FY2027 Proposed Annual Fiscal Plan. CAO's Office staffing and expenditure explanations. FY2027 proposed budget.

3. Richmond City Council, ORD. 2026-063. FY2027 adopted budget and final CAO's Office appropriation. Budget ordinance.

4. Richmond City Council, ORD. 2026-041. $14.7 million Contingency Reserve appropriation, supporting memorandum, and draft promissory note. Ordinance and supporting materials.

5. Richmond City Code § 12-263. Contingency Reserve restrictions and restoration-plan requirements. Richmond Code of Ordinances.

6. Richmond City Charter § 6.16. Council authority concerning contingency appropriations. City Charter.

Source note: Historical surplus figures, FY2028 forecast scenarios, school maintenance estimates, and individual executive compensation figures are drawn from previously reported City financial and compensation information. Those figures should be checked against their underlying reports before publication. The absence of a publicly located restoration plan does not establish that the administration failed to submit one.