Richmond estimates $22 million surplus for last year’s budget

RICHMOND, Va. (WRIC) -- The City of Richmond's fiscal year 2025 budget generated an estimated $22 million surplus, according to a memo shared with city leaders. While the unofficial figure is a boon to the government's finances, some city council members say this estimate could have helped inform policy decisions if it had been shared earlier this year.

In a memo from Odie Donald II, the city's chief administrative officer, said the surplus for fiscal 2025 is estimated to be $22 million.

"The City’s Chief Administrative Officer delivered the surplus memo to City Council on November 15, meeting the deadline required by City Code," a spokesperson for the city told 8News in a statement. "The memo provides only an unaudited estimate of the surplus amount, which will then be updated once the FY 2025 audit is complete."

While the surplus shows signs of promise for the health of the city's economic prospects, some leaders are frustrated that the estimates were not shared sooner, since they could have informed decisions made about current budgeting policies.

“I made this point when we were discussing the property tax rate and I’ll make it again now — this information is both relevant and critical to having an informed discussion about the property tax rate," Kenya Gibson, council member for the 3rd Voter District, said in a statement on Monday. "The deadline was changed last year. My office is working on revisions to ensure we receive this information sooner."

Last month, the Richmond City Council voted against lowering real estate taxes after a heated debate over the city's financial capabilities. Donald had claimed that cutting the rate would have created a nearly $17 million budget shortfall.

“When a rainy day comes, we will get wet,” Donald said during the October meeting. “We have to put money away.”

Ultimately, the council chose to keep the rate -- $1.20 per $100 of assessed value -- in a 4-3 vote, instead of lowering the rate by four cents.

"By law, cities can budget for contingencies which is important," Gibson said in her recent statement. "It’s also important that we are making investments and providing services that a growing city demands. From my perspective, having 90% of surplus dollars go into rainy day funds is worth revisiting."

According to the memo from the chief administrative office, the estimated $22 million -- assuming it is accurate -- would be distributed in the following ways:

• $11 million to the Downturn Reserve Fund
• $8.8 million to the Capital Maintenance Reserve
• $2.2 million to the Special Purpose Reserve

"Looking ahead, the transition of the real estate assessment cycle to align with the fiscal year will improve revenue forecasting, but is also expected to significantly reduce General Fund surpluses in future years," Donald said in the memo to city leaders.

The surplus estimate is expected to change with the release of the Annual Comprehensive Financial Report in January 2026.

"Whether this change results in an increase or decrease is wholly dependent on the outcome of audit procedures, outstanding reconciliations, and component unit reporting," Donald explained in the memo. "At this time, the extent of any adjustments cannot be reasonably determined."