Richmond City Council Organizational Development Standing Committee Meeting - October 6, 2026

The Organizational Development Standing Committee of the Richmond City Council met on October 6, 2026 at 2:15 PM. The meeting consisted of a preliminary budget work session for FY 2028, featuring presentations from the City Assessor, CAO, and PFM consulting, followed by council discussion of budget priorities. A motion was approved to allow Councilmember Stephanie Lynch to participate electronically due to a family caregiving arrangement.

Consent Calendar

• Approval of the minutes from the September 8, 2026 Organizational Development Standing Committee meeting.

Discussion Items

• City Assessor Richard McKeathan presented real estate market trends, forecasting a 4.5% increase in taxable real property for the next reassessment (June 2027). He attributed the moderation to national economic struggles: interest rates at approximately 7.5%, inflation, and gas prices averaging over $4/gallon. Discussion with Councilmembers Gibson, Burton, and Trammell focused on the implications of an 18-month gap since the last reassessment, the conservatism of the forecast, and the need for written interim data. McKeathan agreed to revisit the forecast in spring 2027.
• CAO Lincoln Donald provided a fiscal overview, stating the city’s fiscal health is good but faces structural challenges. He highlighted commitments including a 2.5% real estate tax allocation to the Affordable Housing Trust Fund, upcoming collective bargaining negotiations, a $120 million pension obligation bond resulting in $10 million annual debt service for 20-22 years, and capital reinvestment needs. He mentioned potential cost avoidance measures such as a hiring freeze and pausing non-critical vacancies.
• PFM Group (Danielle Scott Parker, Ashley Anyo, Christy Choi) presented a financial condition assessment and multi-year baseline forecast. Key findings: revenue growth (3-4% annually) is being outpaced by expenditure obligations (7-9% annually), primarily driven by personnel costs (41% of general fund), Richmond Public Schools contributions (23%), debt service, and the Affordable Housing Trust Fund. The baseline forecast, assuming 4.5% assessed value growth in FY28 and 6% thereafter, shows structural deficits in the first three years and fund balance falling below policy by FY2030. The model does not assume next-round collective bargaining increases or tax changes. The impact of a one-cent and four-cent real estate tax reduction was illustrated.
• Mayor Danny Avula acknowledged lower revenue projections than expected, citing the new assessment calendar and national economic uncertainty. He reaffirmed commitments to workforce investment, economic development, safety, and service delivery. He explained that a proposed one-cent real estate tax cut and one-cent meals tax reduction were contingent on the sales tax referendum for school renovation, but fiscal realities may require adjustment.
• Councilmember Gibson requested detailed data on new construction revenue, delinquent tax collections, the actual 4.5% value, and timing for tax rate decisions. Councilmember Abubaker questioned debt service increases (9.3% annual from FY21-24) and compared earlier deficit projections ($27M, $319M) to current PFM projections indicating a potential shortfall around $40M; CAO Donald clarified that the $319M figure is not current and that decisions on hiring and cost avoidance will affect the actual deficit.
• Councilmember Trammell expressed concerns over high real estate taxes for homeowners, especially seniors, and opposition to the code refresh initiative. Mayor Avula responded that new development generates revenue to cover rising government costs and that supply helps control housing costs.
• Councilmember Jones asked for clarity on how PFM’s role differs from Davenport (the city’s long-term financial advisor) and urged integrated financial storytelling. Mayor Avula explained that PFM supports budget development and economic forecasting, while Davenport advises on credit rating and bond issuances.
• Councilmember Gibson raised concerns about Diamond District financing, noting $129 million in general fund line items and questioning whether the project is self-funding given development delays. CAO Donald stated that the $120 million figure relates to debt service and that he would respond to written questions within 30 days, cautioning against conflating different financial items.

Council Budget Priorities

• Mr. Warren read each council district’s citywide and district-specific budget priorities for FY 2028. These will be grouped into themes by council staff, and a resolution with an appendix of priorities will be drafted for introduction in November.

Key Outcomes

• Procedural votes: approval of electronic participation for Councilmember Lynch (unanimous) and approval of September 8 minutes.
• Council staff to collect questions and provide responses within 30 days.
• Budget priorities to be synthesized into a resolution for November introduction.
• Meeting adjourned after addressing all agenda items.