Mayor Jones announces RMA repayment of $60.3 Million

From the Mayor's Office:

CITY OF RICHMOND
News Release


For Immediate Release Contact: Tammy Hawley
Tuesday, June 21, 2011 (804) 646-3110
Tammy.Hawley@Richmondgov.com


Mayor Successfully Negotiates $60.3 Million Repayment to City
~RMA could return funds to the city before year end~

Richmond, VA – Mayor Dwight C. Jones today announced the impending repayment of monies to the city in the amount of $60.3 million from the Richmond Metropolitan Authority (RMA). The RMA is an independent authority and political subdivision that was created in 1966. It was formed originally to build and maintain a toll expressway system to serve the Richmond metropolitan area. Its members include Richmond as well as Chesterfield and Henrico counties. In its formative years, the city of Richmond was the only member of the partnership to contribute land and provide financial support to RMA.

“There are many things this administration has been working to set right for the city of Richmond. Where our financial picture is concerned, the city’s financial operation has been structurally unbalanced in many ways and we've been working to correct things like moving to twice a year tax collections and eliminating the need for revenue anticipation notes for example. Another matter that has been unattended to for some time pertains to millions of dollars that was lent to the RMA by the city of Richmond,” explained Mayor Jones. “I asked my team to explore how and when this money could be returned to the city and the RMA Board has chosen to act on our request.”

The RMA voted unanimously today for the return of monies owed to the city of Richmond in the amount of $60.3 million. It is anticipated that the funds would become available in November of this year once the RMA issues the bonds necessary to pay off the subordinated debt owed to the city.

“We’ve been working with the RMA for more than a year on a way to eliminate this outstanding debt owed the city,” said CAO Byron Marshall. “This plan won’t hurt the credit standing of the RMA, won’t increase tolls, and will return to the city some badly needed funds that can be directed toward some of Richmond's immediate and future needs."

This one-time money will go to the city’s General Fund. Citing the tremendous social and economic costs associated with the history of how these funds came to be owed the city, particularly as it relates to how the expressway affected the neighborhoods it bisects, Mayor Jones said he wanted the city to use this opportunity wisely and prudently. “As we consider the use of these funds, there are some guidelines I feel we should be governed by. These funds can help to repair some of the issues caused by displacement of families and businesses, and can also help to move us closer to a AAA bond rating. We have the opportunity to invest wisely by doing things like getting our undesignated fund balance to 10% and paying off some of our own outstanding debt."

Initially, Richmond was the only jurisdiction to provide financial assistance or subsidies to the expressway system. Moving forward, Mayor Jones said, "We will begin working with RMA and other jurisdictions to look at a more regional approach to transportation and public transportation. As we work regionally, we must also put Richmond first and make investments that will put the city on par with our neighbors who already enjoy a AAA bond rating. Further, paying down debt will free up debt capacity for future catalytic projects and allow us to save on interest payments while we plan for those projects."

It is anticipated that the Mayor would like to focus on future projects like riverfront public space, the baseball diamond, and development that will generate a return on investment in the areas of job creation, workforce development and an enhancing the tax base.

Aside from strengthening the city’s financial picture, the Mayor also indicated an obligation to focus on social needs. “We must also consider the tremendous social cost that is connected to the history of this money, said Mayor Jones. “New roadway systems that were designed to relieve traffic congestion and increase the ease of commuters flowing in and out of the city came with a price tag of displaced residents and businesses. Massive relocations were undertaken, eminent domain laws were used to seize property and communities were torn apart. The communities impacted the most were the lower income areas and the poor.”

The Mayor indicated that he would like to see a plan developed that will make a noticeable dent in poverty in the city and focus on some longstanding concerns. “Such a plan could deal with outstanding issues like the fact that the Blackwell Hope VI development has remained unfinished since 1997, or longstanding needs of our infrastructure like the repaving of Jefferson Davis Highway which has been in disrepair for years, for example. Perhaps there are some things we can do with Creighton Court; things that can help us reduce concentrated poverty are what I’d like to see and what the City Council has asked us to focus on."

The unfinished Blackwell area has impeded the City’s ability to be successful with other projects like Choice Neighborhoods funding applications and Hope VI. Problem public housing areas like Creighton Court are a byproduct of the massive relocations that resulted from the expressway systems.

The Jones Administration will be working to prepare a detailed proposal for the use of funds that will require City Council approval. “I commend the RMA Board for doing the right thing and acting to return these monies to the city of Richmond," continued Mayor Jones. “It is now incumbent upon us to do the right thing with the planned use of these funds and I will be encouraging everyone to make the best use of this unique opportunity.”