October 1 - City of Richmond by yaofenjin


									Credit Presentation
 City of Richmond, VA

September 30 – October 1, 2010
Objectives of Presentation

    Highlight City’s Accomplishments Since a Year Ago

    Build Upon Our Reputation as a Well-Managed Government that
    is Fast Becoming a Tier One City

    Demonstrate a Stable Economy and Exceeded Budget
    Expectations during a Difficult Economic Climate

    Articulate our Roadmap for 2011 and Beyond

   Dwight C. Jones, Mayor
            Elected Mayor of the City of Richmond in November 2008 and has been an active public servant in the City for over 35 years
            First elected to the Virginia House of Delegates in 1993 and has an impressive legislative record that focuses on health services,
            strong finances, and Richmond’s neighborhoods and most fragile citizens
            Received a Bachelor of Arts Degree from Virginia Union University and a Doctorate from United Theological Seminary

   Kathy C. Graziano, President of Council & Representative of 4th District
            Elected to Council in 2004 and chosen to serve as President of City Council in 2009
            Chair of the Land Use, Housing and Transportation Committee and member of the Organizational Development and Finance &
            Economic Development Committees
            Received a Bachelor of Arts Degree from the State University of New York-Cortland.

   Ellen F. Robertson, Vice President of Council & Representative of 6th District
            Elected to Council in 2003 and chosen to serve as Vice President of City Council in 2009
            Chair of the Finance & Economic Development Committee and Vice Chair of the Land Use, Housing and Transportation
            Committee and member of the Organizational Development and Governmental Operations Committees
            Received an Associate Degree from J. Sargeant Reynolds Community College and a Bachelor of Science Degree from Virginia
            Commonwealth University

   Byron C. Marshall, Chief Administrative Officer
            Appointed in July 2009 and has 30+ years of experience in local government
            Extensive background in Finance and Administration from serving as Deputy CAO, Deputy City Manager, & Deputy Comptroller
            in three major U.S. Cities – Austin, Houston and Washington D.C.
            Served as Atlanta’s COO and helped prepare the City to host the 1996 Olympic Games
            Most recently served as President and CEO of the Austin Revitalization Authority in Austin, Texas

   Suzette P. Denslow, Chief of Staff to the Mayor
             Appointed in January 2009 and has 28+ years of Finance and Policy experience in state and local government
             Served under three governors in various roles including: Deputy Secretary of Education, Legislative Director and Deputy Director
             of Policy
             Served as executive and deputy director of municipal leagues in two states

   Peter H. Chapman, Deputy Chief Administrative Officer (Economic & Community Development)
             Appointed in July 2009 and has 20+ years of urban development experience
             Received a Bachelor’s Degree in English literature from Wesleyan University and a Master's Degree in Public Policy from Tufts
             Oversees Economic and Community Development, Minority Business Enterprise, and Real Estate functions

   Marcus D. Jones, Deputy Chief Administrative Officer (Finance & Administration)
             Appointed in August 2009, has 16+ years of experience in local and state government, and served as Deputy Secretary of Finance
             under two governors
             Received a Bachelor’s Degree in Public Administration from James Madison University and has a Master's Degree in Public
             Administration from Virginia Commonwealth University
             Oversees Finance and Administrative functions including Finance, Budget & Strategic Planning, Information Technology,
             Procurement, and Human Resources departments

   Barbara W. Reese, Director of Finance
             Appointed September 2010, has 20+ years of financial management, tax policy, and public-private partnership experience in state
             Served as first CFO of the Department of Transportation, Deputy Secretary of Transportation, and Deputy Director of Policy
             Received a Bachelor’s Degree in American Studies from the University of Mary Washington and a Masters of Public
             Administration from Virginia Commonwealth University

   James P. Duval, Jr., Investment & Debt Portfolio Manager
             Joined the City in 2001 and previously worked 21 years in commercial banking with SunTrust Bank
             Oversees the debt portfolio of the City as well as the cash investment and management

Presentation Outline

   Becoming a Tier One City
   Well Managed Government
   Prosperous Economic Development
   Richmond’s Financial Profile
   Structurally Balanced Budget
   Capital Improvement Plan and Plan of Finance,
   including the Broad Street Community Development
   Authority (CDA)
   Debt Management Polices Governing Limitation on

Becoming a Tier One City

The Goal: Become a Tier One City
   Become a “Tier One” City
   through building a better
   Richmond with excellence and

   Grow by design with a balanced
   economic development approach
   that enhances the vitality of the
   City and the Greater Richmond

   Increase the strength of the City’s
   economy through growth of the
   tax base and stability of the local

   Earn and build the City’s
   reputation as a well-managed
   government by being structurally
   balanced, maintaining core
   services, and protecting the City’s
   fiscal integrity.

Becoming a Tier One City
   Promoting a world class education
           100% of schools accredited for the first time
           Increasing financial investment in K-12 education funding
           Expanding access to early learning opportunities for children
           Construction of two new elementary schools, one middle school and one high school

   Ensuring fiscal accountability and fiscal responsibility
           Structurally balanced budget generating a preliminary $6.7 million budget surplus in FY 2010
           Creation of a structurally sound FY 2011 budget with no interruption of core City services, no tax increases,
           and by proactively addressing a $34 million budget gap
           No furloughs, layoffs, or hiring freeze

   Sustaining Richmond's reputation as being a good place to work and to do business
           No major closings or layoffs
           One of the nation’s 50 best places for business and careers (Forbes.com, April 2010)
           Rated the 14th best metro center for business (Dow Jones Marketwatch.com, December 2009)

   Serving all neighborhoods in the city
           Holistic approach to making sure neighborhoods are safe and secure
           Redeveloping public housing and working to de-concentrate poverty
           Implementing the Neighbor to Neighbor Program and Summer Youth Initiative to develop Richmond’s future

   Ensuring that every child has an equal chance at life and equal access to quality health care
           Establishment of Mayor’s Blue Ribbon Commission on Health Policy

Awards and Honors
  The City has a tradition of awards and honors. Some of the most recent include:

  Richmond ranked 9th by The Brookings Institute’s MetroMonitor for Gross Metropolitan Growth
  from the 4th quarter of 2009 to the 1st quarter of 2010
  Richmond ranked 12th on a ForbesWoman list of America’s Top 50 U.S. cities for working mothers,
  Richmond ranked 1st on Parenting.com’s “The Best Cities for Families & 10 Healthiest Cities” list
  Richmond ranked 12th on “The 20 Healthiest Housing Markets for 2010” by Builderonline.com
  Richmond recognized as 3rd “Best Tennis Town in America” by the United States Tennis
  Richmond named “one of the nation's 50 best places for business and careers” by Forbes.com

  Richmond ranked 6th on Business Week’s “Best Places to Start Over” list, citing employment
  prospects in diverse industries
  Richmond ranked 14th on Marketwatch.com’s “Best Metro Centers for Business”
  Richmond ranked 19th on Next Generation Consulting’s “Next Cities: Mighty Micros” list of best
  small cities for young professionals for life and work
  Richmond ranked 39th on Forbes’s “Best Places for Business Careers”
  Carytown ranked 9th on Southern Living’s “Top 10 Neighborhoods for Shopping in the South”

Well Managed Government

Characteristics of a Tier One City
    The City has identified seven characteristics of a Tier One city as its

        Well Managed Government
        Prosperous Economic Development
        Community Safety & Well Being
        Sustainability and the Natural Environment
        Unique and Inclusive Communities and Neighborhoods
        Education and Workforce Development

    Well Managed Government is the foundation upon which the other
    six characteristics are built.
    While future budgets will incorporate all seven characteristics, the
    FY 2011 budget places an emphasis on the Well Managed
    Government and Prosperous Economy characteristics.

Well Managed Government: FY 2010 & FY 2011
   Actions in FY 2010 deliver the commitment to Well Managed Government:
           Implemented a five-year revenue & expenditure forecast
           Implemented quarterly financial reporting, including an economic outlook
           Completed a top-down and bottom-up detailed budget review
           Implemented a revenue administration system for real estate and personal property
           Released RFP for Enterprise Resource Planning (ERP) System Project
           Aggressive use of low-cost debt financing, including ARRA debt programs

   The City’s FY 2011 budget builds on these deliverables to continue the City on the path to
   becoming a Tier One City, including:
           Implementing semi-annual real estate tax billing, eliminating the annual $70 million revenue
           anticipation note
           Implementing the comprehensive tax compliance plan, generating additional revenue with no tax
           Completing of the revenue system implementation and execution of the ERP contract, gaining
           business process improvements and efficiencies
           Jointly purchasing of health benefits with Richmond Public Schools, lowering costs
           Restructuring of the Broad Street Community Development Authority (CDA), lowering costs
           Updating the City’s debt management and financial management policies
           Developing detailed, project level cash flow model for CIP projects
           Incorporating pay-as-you-go funding into the CIP and other fixed assets
           Adopting administrative budget policies that allow for adjustments during a fiscal year to quickly
           respond to a changing fiscal environment and one-time economic opportunities
           Developing a revenue stabilization fund to abate short-term fiscal issues

Elimination of Revenue Anticipation Note
                                                                        Fiscal      RAN       % of
  FY 2010 RAN of $70,000,000 was paid off on 6/24/2010.                 Year     ($ Amount) Revenues

  The City will not borrow in FY 2011 for this purpose.                 2001     $65,000,000   13.6%
                                                                        2002     $50,000,000   10.1%
                                                                        2003     $45,000,000   9.0%
                                                                        2004     $45,000,000   8.5%
  Beginning in January 2011, the city will implement semi-annual
                                                                        2005     $45,000,000   8.2%
  real estate tax collection in January and June of each fiscal year.   2006     $55,000,000   9.9%
                                                                        2007     $65,000,000   10.3%
  Freezing FY 2011 assessments at FY 2010 levels with a one-time        2008     $65,000,000   10.0%
                                                                        2009     $75,000,000   11.5%
  switch to a biennial assessment.                                      2010     $70,000,000   11.1%
                                                                        2011          $0        0%
  Beginning with FY 2012, set the real estate tax rate forward to
  coincide with the budget under consideration.

  Enables the City to fix its cash flow issue by spreading the largest component of local
  revenues over two approximately equal installments.

  Modifications are being proposed to Tax Relief for Elderly and Disabled Programs to
  mitigate any impact on vulnerable citizens.
Prosperous Economic Development

Growing a Prosperous Economy By Design - The Goals
    Long-term growth and development of Richmond’s job base and labor
    A sustainable local economy that:
          Affords access to opportunity for Richmond residents
          Fosters viable mixed-income residential neighborhoods
          Develops and supports Richmond’s tax revenue base
          Maximizes the city’s assets and advantages without compromising the health of
          local communities and residents
          Works with our public and private partners to enhance our interconnected
    Focus areas:
          Business retention & expansion
          Business attraction
          Business technical assistance
          Neighborhood revitalization
          Workforce development
          Economic & community development finance

Recent Economic Development Successes
   MeadWestvaco (Fortune 500 Company)
          In March 2010, opened new headquarters tower on
          the riverfront; in May 2010 announced its Center
          for Packaging Innovation (CPI) will be relocated
          from Raleigh, NC to Richmond.
          Employment: 400 Jobs (Headquarters)
                         128 (CPI)
          Investment: $100 Million (Headquarters)
                                                               MeadWestvaco Headquarters
                       $10 Million (CPI)

   Williams Mullen Tower (Law Firm)
          15-story tower opened in June 2010
          Employment: 350 Jobs Retained
          Investment: $60 Million

   Pfizer Consumer Health Research & Development
   (Fortune 500 Company)
          Pfizer acquired Wyeth in October 2009. Wyeth’s
          Sherwood Avenue facility had been in operation
          since 1963. After evaluating locations to identify
          opportunities for consolidation, Pfizer decided to
          maintain the operations currently located in
          Employment: 300+ Jobs Retained
                                                                 Williams Mullen Tower

Key Characteristics of Richmond
   Center of Government Activity
   Richmond is the Capital of the Commonwealth
   of Virginia. Richmond is also home to the Fifth
   District Federal Reserve and Fourth Circuit U.S.
   Court of Appeals.

   Cultural Hub of the Region
   Richmond has14 museums, diverse
   entertainment venues, and is the only city with
   Class IV white water in its downtown.

   Transportation Crossroads
   Richmond is strategically located at the mid-
   point of the East Coast: 110 Miles South of
   Washington, DC and 85 Miles Northwest of
   Hampton Roads Area, both I-95 and I-64
   interchange in the City.

   Vitality and Vibrancy
   At the heart of the metropolitan area,
   Richmond’s diverse economy includes two
   Fortune 500 headquarters with ten Fortune 1000
   companies in the region.

A Center of Government Activity
   Capital of the Commonwealth
            State agencies provide 25,700+ jobs and are a significant part of the economy
   United States Court of Appeals for the Fourth Circuit
            300+ employees
   Federal Reserve System Banking Headquarters
            Headquarters for the Fifth Federal Reserve District, which includes Maryland,
            Washington D.C., Virginia, North Carolina, South Carolina, and most of West Virginia.
            1,700+ employees

    Virginia State Capitol      U.S. Court of Appeals for the 4th Circuit   Fifth Federal Reserve District

Central Location in Virginia - Transportation
  Perfectly Balanced for business on the
  East Coast.
  Major Interchange of Interstates I-95
  and I-64.
  Proximity to the Nation’s Capital –
  110 Miles to Washington, DC – 2
  Hours by car/train.
  Port of Richmond – Furthest inland
  deepwater port in the Commonwealth.
  85 Miles Northwest of Hampton
  Roads – Near one of the world’s largest
  natural deepwater ports.
  1 Hour Flight to New York City –
  Financial Capital of the World.
  Richmond International Airport –
  One of the most modern and well-
  equipped airports in the eastern United
  States is located only 7 miles southeast
  of Richmond’s business district.

Museums & Cultural Assets
   Virginia Museum of Fine Arts
          A public-private partnership, the museum is the nation’s first and largest state art museum
          $150 Million expansion project completed in 2010 increased gallery space to 134,000 square feet

   American Civil War Center
          Host of Richmond Folk Festival with 175,000+ visitors; seven stages and 30+ performing groups
          Home to National Park Service Richmond National Battlefield Park
          $13.6 Million invested since 2006
   Other museums include:
          Black History Museum & Cultural Center              Valentine Richmond History Center
          Children’s Museum of Richmond                       Virginia Aviation Museum
          Edgar Allen Poe Museum                              Virginia Historical Society
          Lewis Ginter Botanical Garden                       Virginia Holocaust Museum
          Maggie L. Walker National Historic Site             Visual Arts Center of Richmond
          Science Museum of Virginia                          White House & Museum of the Confederacy

                  VMFA                   American Civil War Center at Historic Tredegar

Performing Arts & Venues
   Richmond CenterStage
           $77 Million renovation and expansion of the Carpenter
           Center and former Thalhimer’s Department Store opened in
           September 2009
           Site includes three performing venues and one showcase

   Greater Richmond Convention Center
           700,000 square foot facility on 5½ city blocks. Interior
           accommodations include 178,159 s.f. of exhibit space, 32
           meeting rooms and the 30,550 s.f. Grand Ballroom
                                                                             Richmond CenterStage

   Other venues include:
           Landmark Theater
           Empire Theater
           Richmond Coliseum
           Diamond Baseball Stadium

   Performing groups include:
           Richmond Ballet
           Richmond Symphony
           Theater IV The Children’s Theater of Virginia

                                                                      Greater Richmond Convention Center

Higher Education Institutions
   Virginia Commonwealth University
            Largest university in Virginia with 32,000+ students in 208
            certificate and degree programs in the arts, sciences and humanities.
            One of the nation’s leading academic medical centers – comprised
            of MCV Hospitals and the Health Sciences Schools of Virginia
            Commonwealth University.
            Since 2006, $665 Million of direct investment in the City of
            Richmond’s downtown area.

   University of Richmond
            Founded in 1830, a private, highly selective liberal arts university
            with 7,000+ undergraduate and graduate Students.
            Five schools offer Undergraduate, Master’s and Law Degrees.
            350 acre suburban campus in the City located six miles from
            Downtown Richmond.
            Since 2006, $150 Million of direct investment.

   Virginia Union University
            Founded in 1865, a private, historically African-American Baptist
            university with approximately 1,600 undergraduate and graduate
            Samuel DeWitt Proctor School of Theology – Graduate School
            Offering Theological Studies.
            Located in Downtown Richmond.
            Since 2006, $3.8 Million of direct investment.

   Community Colleges and Private Colleges

Richmond’s Financial Profile

Richmond’s Economic Outlook is Strong
       Economic development successes led to results that exceeded expectations.
              Richmond’s per capita income level is now for                                    The City’s population has grown every year
              the third year straight above the Commonwealth                                   since 2004 and is now above 200,000. The
              and U.S. averages.                                                               population has grown 3.4% over the last 5

                                  Per Capita Income                                                                         Population

            $50,000                                                                              206,000
            $45,000                                                                              204,000

            $40,000                                                                              202,000

            $35,000                                                                              200,000
            $30,000                                 Richmond
            $25,000                                 U.S.
            $15,000                                                                              190,000
                         2003         2004   2005          2006       2007     2008                           2004      2005      2006    2007    2008   2009

                                         Last 5 Years                                                                           Last 5 Years
                            Per Capita Income                     Richmond as a % of                                 Year      Population    % Change
            Year      Richmond Virginia        U.S.                Virginia      U.S.                                2004       197,432       -0.34%
            2003       34,550     34,979      32,271                  99%       107%                                 2005       197,915        0.24%
            2004       37,481     36,842      33,881                 102%       111%                                 2006       198,992        0.54%
            2005       38,553     38,892      35,424                  99%       109%                                 2007       200,655        0.84%
            2006       42,261     41,267      37,698                 102%       112%                                 2008       202,867        1.10%
            2007       44,180     43,158      39,392                 102%       112%                                 2009       204,451        0.78%
            2008       44,801     44,075      40,166                102%        112%
Source: Bureau of Economic Analysis                                                     Source: U.S. Census Bureau

Comparatively, Richmond Exceeds Our Peers
                Per Capita Income (CY 2008)             Total Valuation per Capita (FY 2008)

                 Per Capita Income (CY 2008)             Total Valuation per Capita (FY 2008)

      Richmond’s per capita income is the             Richmond’s $110,00 total valuation per
      highest of its peer group, well exceeding       capita (real and personal property) is
      the average of Virginia “AA” peers.             among the highest “AA” rated Virginia
                                                      cities and exceeds the average.

  Source: Bureau of Economic Analysis.            Source: 2009 CAFRs.

Diversity of the Tax Base
                 Taxpayer Distribution                                   Top 25 Taxpayers – Assessed Valuation
                     Top 25 Taxpayers                                                                       FY 2010
               88%                                                                                              Real Estate
                                                                                                                Assessment       % of Total
                                                               1   Philip Morris, Inc & Philip Morris USA   $      710,722,000        3.4%
                                                               2   Hines Riverfront Plaza LP                       247,500,000        1.2%
                                                               3   James Center Property LLC                       187,998,000        0.9%
                                                               4   Dominion Resources, Inc                         144,411,000        0.7%
                                                               5   Chippenham Hospital, Inc                        105,605,000        0.5%
                                                               6   Federal Reserve Bank of Richmond                103,928,000        0.5%
                                                               7   Foundry Park I LLC                               89,060,000        0.4%
                                                               8   Parmenter 919 Main St LP                         83,574,000        0.4%
                                                               9   Riverside Owner LLC                              78,151,000        0.4%
                                                              10   Gambles Hill LLC                                 74,921,000        0.4%
                                         12%                  11   American Retirement Corp                         70,000,000        0.3%
                                                              12   First States Invest 3500 LLC                     69,571,000        0.3%
                                                              13   SunTrust Bank                                    63,519,000        0.3%
   Richmond has a well diversified tax base with no           14   Stony Point Fashion Pk Assoc LLC                 54,132,000        0.3%
   significant concentration in any one taxpayer.             15   Robins A H Co, Inc                               48,212,000        0.2%
                                                              16   Media General, Inc                               46,067,000        0.2%
                                                              17   Miller & Rhoads Building LLC                     42,010,000        0.2%
   The real estate assessed valuation of the top 25 tax       18   Apple Seven SPE Richmond                         39,575,000        0.2%
   payers represents less than 12% of the total real estate   19   Eck Enterprises                                  38,029,000        0.2%
                                                              20   Alleghany Warehouse Co, Inc                      36,004,000        0.2%
   tax base in FY 2010.                                       21   S J W Limited Partnership                        35,000,000        0.2%
                                                              22   Historic Hotels LLC                              34,448,000        0.2%
                                                              23   Saul Subsidairy I Limited                        32,581,000        0.2%
   The top 10 taxpayers represent 8.8% of the total.          24   Overnite Transportation Co                       32,284,000        0.2%
                                                              25   CRIT-VA Inc                                      31,805,000        0.2%
   Philip Morris companies are the largest taxpayers at            Subtotal                                 $    2,499,107,000       11.8%
   3.4% of the total.
                                                                   All Other Taxable Properties             $   18,594,931,672       88.2%

                                                                   Total Taxable Assessment                 $   21,094,038,672      100.0%

Employment by Industry
                             Employment Distribution by Industry

                                                                 *Non-Disclosable Data.

                                                                 Source: Virginia Employment Commission,
                                                                 Quarterly Census of Employment and Wages, 4th Quarter 2009.

  As the capital of Virginia, state government presence represents the largest employment sector by
  Richmond’s employment distribution is well diversified with the health care sector comprising the
  largest component after state government.

Employment is Improving
 Employment showing improvement throughout 2010 since reaching its trough in 2009.
    Richmond residential employment at highest                        Since January, the Richmond region has added
    level since August 2009.                                          6,400 jobs.
    Employment has increased 1.8% since January

           Richmond Residential Employment                          Current Employment Statistics – Richmond MSA



                                                                                  -1,900                                      Other Services
                                                                                                              1,700           Government

                                                                                                                              Leisure & Hospitality
  85,000                                                                                                                      Educational & Health Services
                                                                                           -400                               Professional & Business Services

  80,000                                                                                                                      Information
       2001 2002 2003 2004 2005 2006 2007 2008 2009 2010                                   -500
                                                                                                                              Trade, Transportation & Utilities
                                                                                                       1,400                  Manufacturing


                                                           -4,000             -2,000              0                   2,000          4,000               6,000

Real Estate Tax Rates Are Steady

             Real Estate Tax Rate Trends                                                    Real Estate Tax Collections

 $1.35                                                                       $200

 $1.20                                                                       $100
 $1.10                                                                       $50
         2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
                                                                                     2001   2002   2003   2004   2005   2006   2007   2008   2009   2010

     Steady tax rate of $1.20 per $100 of assessed                                  Even with no tax rate increase and a struggling
     value since 2008                                                               national economy, the City has had stability in
                                                                                    real estate tax revenues.
               Each $0.01 per $100 of assessed value
               represents $1.84 million.
                                                                                    With improved tax compliance efforts, real
               In Richmond, unlike surrounding                                      estate collections are projected to grow even
               localities, assessed values stayed steady                            with stable assessments.
               in 2010.

The Housing Market is Stable
                                                                              Average Sales Price






                           F e b-   M a r- Apr-09 M a y- J un-09 J ul-09   Aug-   S e p- Oc t-09 No v-   De c -   J a n-10 F e b-10 M a r-10 Apr-10   M a y- J un-10 J ul-10 Aug-10
                            09       09            09                       09     09             09      09                                           10

  Richmond’s diversified housing market has been relatively stable throughout the housing market decline.

  The average sales price of homes sold in Richmond was $268,125 for August 2010.

  Foreclosures have been relatively low:
              Foreclosures comprised approximately 0.20% of the total housing units in the City as of August 2010 – well
              below the national rate

Taxable Sales Have Fared Better than Other Localities

                     Taxable Sales                            Recession Impact – Comparative 2 Year Decline


                                                                          Newport News







                                                              -12.00%         -10.00%       -8.00%       -6.00%     -4.00%      -2.00%   0.00%

                                                                In comparison to Richmond’s stability in taxable sales,
                                                                Richmond’s comparable peer group has experienced larger
                                                                average decline in taxable sales.
                                                                Taxable sales in Richmond have declined 5.9% over the
                                                                past two years (2008-2009) versus the 7.8% average of the
   Taxable sales reflect a cumulative growth of 16.5% since     City’s peers.
   the beginning of the decade.                                 Surrounding counties have larger declines:
   Although Richmond’s taxable sales have been affected by                     Chesterfield                 7.0%
   the national economic recession, their strength is a                                                                                          31
   testament to the economic development activities within                     Hanover                      14.7%
   the City.                                                                   Henrico                      8.9%

Structurally Balanced Budget

Richmond’s Structurally Balanced Budget
    The City’s FY 2010 top financial priority was to proactively address changes
    in the revenue forecast and implement a structurally balanced budget. The
    budget was amended during FY 2010 in order to make it so.
       The FY 2011 budget is structurally balanced.
    The City’s budgetary surplus preliminary estimate totals $6.7 million - $3.5
    million in revenue surplus and $3.2 million in expenditure savings
    Unlike FY 2009 when revenues were far below the forecast, the FY 2010 forecast was
    closely monitored and refined to ensure that forecast and collections were in alignment
    – ending within 99.4% of the forecast.

       General property tax collections greater than expected.
       Increased collections in Machinery & Tools and Bank Franchise taxes
       Increased collections related to delinquent accounts due to improved practices.
       Partially offsetting improvements in revenue were declines in sales tax,
       intergovernmental payments and declines in revenue related to charges for goods
       and services.

FY 2010 Preliminary Year End Revenue Estimate (Budgetary Basis)

                                                                                                                       Variance from
                                                    FY2009                    Final               Preliminary           Final Budget
               Source                               Actual                   FY2010                 FY2010             Amount      %
Taxes                                               427,338,579             408,991,117                  425,647,104   16,655,987      4.1%

Licenses, Permits & Fees                             36,190,386               36,851,317                  35,114,702   (1,736,615)    (4.7%)

Intergovernmental Revenue                           116,625,327             120,619,716                  111,801,030   (8,818,686)    (7.3%)

Fines and Forfeits                                     9,246,562                9,297,296                  9,756,280      458,984      4.9%

Payments to the General Fund                         20,768,927               23,317,280                  23,745,546      428,266      1.8%

Other Utility Payments                                 6,651,796                7,317,056                  7,342,183       25,127      0.3%

Charges for Goods & Services                         21,468,315               23,074,181                  20,409,422   (2,664,759)   (11.5%)

Other Sources of Revenue                               1,954,254                4,684,831                  3,848,912    (835,919)    (17.8%)

Total General Fund Revenue                        640,244,146              634,152,794                   637,665,179   3,512,385      0.6%
  * Does not Include obligations from previous FY2009 amounts that were later accrued ($1.55 million).

FY 2010 Preliminary Year End Estimate (Budgetary Basis)
    The FY 2010 budget was amended to adjust spending authority across
    departments and appropriately brought the Risk Management internal service
    fund into the FY 2010 General Fund Budget, increasing the total
    appropriation to $635.7 million.

     Spending ended 98.9% of the final budget, with required reservations
     consuming a portion of the resulting budget surplus.

                                                    Final     Preliminary    Variance from
                                       Budget      Budget      Estimate       Final Budget
                                                                            Amount         %
   Total General Fund Expenditures   629,987,963 635,702,579 628,695,910    7,006,669   1.1%

Expenditure Savings are Reduced by Required Designations and Reservations

           FY 2010 Preliminary Year-End Expenditure Estimate
                           (Budgetary Basis)
                                            FY 2010
                                            Amended        FY 2010 Year-       Variance
 Source                                      Budget        End Estimate      Amount     %

 Expenditures Prior to Reservations          635,702,580      628,695,910     7,006,669      1.1%
  Port of Richmond                                     -        1,000,000    (1,000,000)
  Encumbrance Roll                                     -        1,000,000    (1,000,000)
  Reserve for Schools (sales tax)                      -          501,300     (501,300)
  Notes Receivable                                     -          543,100     (543,100)
  Litigation                                           -          750,000     (750,000)

 Total General Fund Budget                   635,702,580      632,490,310     3,212,269      0.5%

      The City’s budgetary surplus preliminary estimate totals $6.7 million, comprised of:
          Revenue Surplus - $3.5 million
          Expenditure savings - $3.2 million

The City Balanced its Budget Without Tapping the Undesignated Fund Balance

           The City will use the FY 2010 budget surplus on one-time needs that support well
           managed government, structural soundness, and economic prosperity.
           The City is committed to growing its undesignated fund balance and other reserves.
           In FY 2010 the City took the first steps toward addressing necessary changes in fund
           balance related to GASB 54.
           The preliminary estimate for the FY 2010 undesignated fund balance is 9.38% of the
           adopted budget. Without further additions, the FY 2011 fund balance is estimated to
           be 9.35%.

                 Undesignated Fund Balance                                 Undesignated Fund Balance - % of Expenditures


   9%                                                                     $60
   6%                                                                     $40
                                                   % of Budget            $30
   4%                                              Policy Target
   3%                                                                     $20
   0%                                                                      $0
                                                                                1997 1999   2001 2003   2005 2007 2009 2011
         1997   1999   2001   2003   2005   2007       2009        2011

FY 2011 Budget is Structurally Sound
   The FY 2011 budget totals $637.2 million
    –   No tax increases
    –   Increases funding for K-12 education
    –   Funds retirement
    –   Contains costs including health care

   The budget – based on the principles of well managed
   government – serves the community, runs the business, manages
   resources, and develops employees.

   The Administration has set an internal objective of achieving $3
   million in additional operating savings by January 31, 2011

Richmond Pension Plans
  The City offers both a Defined Contribution and a Defined Benefit Plan.
  With respect to the Defined Benefit Plan:

     The City has taken significant steps to enhance the plan’s funded status. These steps
         Directing all new hires into a Defined Contribution Plan (July 1, 2006).
         Eliminating COLAs in 2006 and 2007, and providing a less than one percent COLA in
         2008 (No COLA is provided in FY 2011).
         Providing additional City contributions of $8.3 million in FY 2011

     The funded status exceeded 54.4% in 2009.
         The FY 2010 funded status is projected to exceed FY 2009 but not reach 60%.

     The City will continue to take measures to increase the funded status with a goal of
     reaching a funded status of at least 80%.

GASB 45 – Other Post Employment Benefits
  The City engaged Wachovia Retirement Services to provide a cost evaluation study to determine
  the City’s actuarial OPEB contribution in 2008.

  The City initiated changes to its health benefits plan in 2008 which have greatly reduced the
  liability. These steps included:
    Eliminating coverage for individuals eligible for Medicare (65+ years old).
    Freezing the Defined Benefit Health Care Plan to include only employees hired prior to January
    1, 1997.

  June 30, 2009 OPEB unfunded
  actuarial liability (UAAL) was
  $76.2 million.

  Annual required contribution
  (ARC) in FY 2009 was $4.6 million.

   Capital Improvement Plan :
Addressing Key Infrastructure Needs

Capital Improvement Plan (CIP) Priorities
                             Major Project Area ($Million)
            Public Schools                                               $126.9
            New City Jail Project                                        $117.6
            Other City Facilities                                          $58.4
            Infrastructure                                                 $33.7
            Economic & Neighborhood Development                            $14.0
            Broad Street CDA                                               $67.1
            TOTAL                                                        $417.5

    Plan of finance incorporates:
    1. Commercial Paper/BAN approach followed by “take-out” funding from long-term
       G.O. Bonds to minimize interest expense and impact on debt burden on the City

    2. November 2010 G.O. Bonds financing of Broad Street CDA asset purchase

The 5-Year CIP continues focus on Schools and the Jail

                                                              Adopted                               Planning Years                                  5-Year
  CIP Categories                                              FY 2011           FY2012           FY2013           FY2014           FY2015           Total
  Schools Projects                                        $    35,850,070   $ 37,482,419     $ 22,059,181     $ 20,800,000     $ 10,676,261     $ 126,867,931
  City Jail                                               $    15,600,000   $ 30,000,000     $ 45,000,000     $ 22,000,000     $ 5,000,000      $ 117,600,000
  Other City Facilities                                   $    22,732,643   $ 14,942,479     $ 10,321,852     $ 6,350,553      $ 4,023,739      $   58,371,266
  Infrastructure                                          $    11,711,243   $ 7,100,000      $ 6,870,000      $ 4,420,000      $ 3,550,000      $   33,651,243
  Economic & Neighborhood Development                     $     3,350,000   $ 6,150,000      $ 2,716,978      $     900,000    $     850,000    $   13,966,978
  Acquire Broad Street CDA (1)                            $    67,100,000   $            -   $            -   $            -   $            -   $   67,100,000
  Total                                                   $ 156,343,956     $ 95,674,898     $ 86,968,011     $ 54,470,553     $ 24,100,000     $ 417,557,418

  Funding Sources
  Commercial Paper/GO Bonds (2)                           $ 111,811,838     $ 95,474,898     $ 86,968,011     $ 54,470,553     $ 24,100,000     $ 372,825,300
  GO Recovery Economic Dev Bonds (ARRA)                   $    22,482,875   $            -   $            -   $            -   $            -   $   22,482,875
  GO Qualified School Construction Bonds
  (ARRA)                                                  $    14,983,000   $            -   $            -   $            -   $            -   $   14,983,000
  Other Funding                                           $     7,066,243   $     200,000    $            -   $            -   $            -   $    7,266,243
  Total                                                   $ 156,343,956     $ 95,674,898     $ 86,968,011     $ 54,470,553     $ 24,100,000     $ 417,557,418
  1.   Estimated amount required to payoff existing CDA
  2.   Includes Prior Year Appropriations of $4,050,370

  General Fund Tax supported projects only, excluding Utilities CIP needs

Series 2010 Debt Issuances
   A General Obligation Bond financing is planned to accomplish the following:

   1) $113.9 Million: To refund certain maturities of three existing G.O. bond
                      issues of the City (Series 2000A, 2002A and 2004A) at
                      lower interest rates to achieve debt service savings
   2) $14.98 Million: Qualified School Construction Bonds (QSCB) –
                      Allocation of 0% subsidized funding directly to
                      Richmond made pursuant to the American Reinvestment
                      and Recovery Act
   3) $67.1 Million: To payoff and refinance the remaining $65.7 million of
                      high interest Broad Street CDA debt

   Total Transactions:           Approximately $196 Million
   Targeted Sale Date:           November 3, 2010
   Targeted Closing Date:        November 16, 2010

Series 2010 Debt Issuances – G.O. Refinancing
   Series 2000A Bonds – Current refunding of the 2012-2018 maturities
   totaling $67.5 Million.
         Utility System allocated debt (Gas, Water and Wastewater).
         Final FY 2018 maturity will not be extended
         Estimated cash flow debt service savings (as of Sept 15) of $10.4
         million will be structured on an approximately annual level basis.

   Remainder of the $113.9 million will be used for advanced refunding of
   callable Series 2002A ($21.5 Million) and 2004A Bonds ($17.4
   Million) – if the City’s NPV 3% savings target is achieved. City will
   refund all, some, or none of this debt based on market conditions in
         General Fund allocated debt
         Final 2023 maturity will not be extended
         Estimated cash flow debt service savings (as of Sept 15) of $3.1 million will be
         structured on an approximately annual level basis
         Potential savings not factored in to the FY2011 budget.

Series 2010 Debt Issuances – QSCB Allocation
   The City was one of two localities in the Commonwealth to
   receive a direct allocation of Qualified School Construction
   Bonds (QSCB) in the amount of $14,983,000.
         The QSCB is available as a result of the American Reinvestment and
         Recovery Act
         Federal Interest Subsidy is anticipated to cover 100% of interest costs

   The QSCB will not be an additional borrowing authorization;
   rather, it will replace the current tax-exempt authorization at 0%
         Replaces approximately $15 Million of market rate tax-exempt funding

   Preliminary structure assumes the following:
         Bullet maturity of 17 years
         Estimated level sinking fund payments

Broad Street CDA Overview
    The CDA was created by City Council Ordinance on July 2, 2002.

    The CDA owns three parking garages and two surface parking lots
    located in the 31.5 acres that constitute the CDA District.

    In 2003, the CDA issued $66.7 million of 30-Year Revenue Bond
    debt with $65.7 million outstanding today.

    This CDA bond debt carries interest rates of 7.10% - 7.500%.
          The City can issue GO bond debt today at rates of 3.50% - 4.00%

City Obligations Under the Current CDA Structure

   City’s $3.0 Million Moral Obligation

   $250,000 – annual payments for Special Parking Rights

   $400,000 – annual payments for Richmond Coliseum

   From 2004-2008, $3.25 Million in payments, not including
   principal payments

   Debt was sold as unrated (junk) bonds at high interest rates

   Adverse impact on the City’s bond ratings in the event of a CDA
Restructuring of CDA Debt
   Replacing high interest rate CDA debt with lower interest rate City
   issued GO Bonds is projected to reduce the annual debt service
   outlay on the $65.7 million of debt by approximately $1.3 million
   per year. (From $6.1 million to $4.8 million annually).

   New restructured debt would begin repayment in FY 2012 (No
   FY2011 payment) with final maturity in FY2032 (Same final
   maturity as existing CDA bonds).

   City would better control the management of public parking in
   downtown Richmond. Other parking assets could be folded in at later
   dates. Recent parking study strongly recommends that City
   consolidate CDA, RRHA, RMA, and City owned parking assets
   under one parking entity.

Existing Debt as of June 30, 2010
       Existing Debt Service and Payout Ratio                                             Existing Outstanding Debt

  Total Tax Supported Debt – Excludes Moral Obligation Debt.
  (1)Excludes Commercial Paper of $26 Million.
  (2)Principal shown above differs by $637,971, which represents the
  amount of the 2004 QZABs and the actual payments to redeem the 2004

                                                                        Includes Commercial Paper of $26 Million.     50

Existing & Projected Debt Service
 Existing and Proposed Debt Service – Includes anticipated FY 2010 G.O. bonds and projected
 issuance for all CIP; Does not include potential refunding.

           Existing and Projected Debt Service

     Debt Management Policy – Governing Structure
  General Fund supported debt will be structured in a manner such
  that not less than 60% of the outstanding debt will be retired
  within 10 years.

  All proposed debt shown above meets or exceeds the City’s 60%
  10-year payout ratio.
 Debt Management Policies
Governing Limitation on Debt

The City is well below the 7.5% total taxable real estate policy

   The City’s General Fund debt will not exceed 7.5% of the City’s total taxable
   real estate value. This policy will be reset this year.

                 Debt to Assessed Valuation of Real Estate

       Assessed Value Growth Rate assumptions: 2011 - 1.2%, 2012 - 1.3%, 2013 - 1.9%, 2014 - 2.8%, 2015 - 3.2%; thereafter, 2.5%.


The City is well below the 7% of per capital income policy

    Per Capita general fund supported debt will not exceed 7% of per capita
    personal income.

                             Debt vs. Income

      Projected Income Growth Rate = 2.0%.
      Population Growth = 0%.                                                 54

The City is below the 10% of total GF budget limit
   The amount required to pay general fund supported debt service will not exceed
   10% of the total general fund budget.
         Former CDA debt service is now included in new debt and is within policy.
         Policy excludes moral obligation indebtedness and intergovernmental
         (Commonwealth) funded School Board budget.

                        Debt Service vs. Revenues

      Total General Fund Budget Growth Rates = 2011 - 1.2%, 2012 - 1.3%, 2013 - 1.9%, 2014 - 2.8%, 2015 - 3.2%; thereafter, 2.5%.

Debt Ratio – Total Debt Service vs. Total Expenditures
      Total Debt Service vs. Total Expenditures                                                                  FY 2009 Comparative

        Includes 100% of Richmond Public Schools
        intergovernmental revenues and moral
        obligation debt, which does not have                                                        Including all tax supported obligations, the
        offsetting revenues.                                                                        City’s total debt service is less than 10% of
        Former CDA debt now included in new G.O.
        debt service beginning in FY 2011.
  Notes:                                                                                   Source: 2009 CAFRs.
  Includes 100% of Richmond Public School Operating Budget (Commonwealth
      Intergovernmental Revenues).
  General Fund Budget Growth Rates = 2011 - 1.2%, 2012 - 1.3%, 2013 – 1.9%, 2014 - 2.8%.
  Schools Budget Growth Rates = 2011 - (10%), 2012 - 0.5%, 2013 - 1.0%, 2014 - 2.5%.

Debt Ratio – Total Debt vs. Total Valuation
                Total Debt vs. Full Valuation                                                           FY 2009 Comparative

     Full valuation includes Real Estate and
     Personal Property; debt includes all tax-
                                                                                            Including all tax supported obligations, the
     supported G.O. Bonds and M.O. Bonds.
                                                                                            City’s total debt burden is less than the
                                                                                            average of the comparable “AA” cities.
     Former CDA debt now included in new G.O.
     debt service beginning in FY 2011.
                                                                                  Source: 2009 CAFRs.
   Total A.V. Growth Rate = 2011 - 1.1%, 2012 - 1.4%, 2013 - 1.9%, 2014 - 2.3%.

In Summary -
   Richmond’s Financial and Economic Performance are
   Strong – Exceeding our Peers

   We have Built Upon Our Reputation as a Well-
   Managed Government that is Fast Becoming a Tier One

   Our 2010 Debt Financings Improve Our Debt Position
   and Take Advantage of Low Interest Rates


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