Chesterfield furloughs 500 positions as local governments rework budgets

The Chesterfield County Administration Building at 9901 Lori Road. (BizSense file photo)

As area localities revise their fiscal budgets amid plummeting revenues and grim economic forecasts, one local government is going a step further in its response to the coronavirus, furloughing hundreds of employees indefinitely.

In a release distributed late Monday afternoon, Chesterfield County said it will furlough more than 500 part-time and full-time employee positions effective this Saturday, as part of its efforts to weather the financial impacts of COVID-19.

Employees were notified of the furloughs last week, according to the release, which said roughly 10 percent of the affected positions are currently vacant. Furloughed employees are eligible for unemployment and six months of county-paid health and dental benefits.

Joe Casey

County Manager Joe Casey clarified Tuesday that the bulk of the positions are part-time employees working 30 hours or less who receive benefits, as well as programmatic and seasonal employees across various departments. He said about 15 of the employees are full-time positions, some of which may involve resignations or retirements.

The furloughs come amid various responses by local governments to stem the tide of coronavirus impacts to current and proposed operating budgets. Chesterfield said 40 percent of its revenues are tied to consumer behavior such as retail sales and travel, both of which have nosedived amid response to the pandemic.

“Included in that percentage is the county’s dependence on state revenues which are tied directly to employment and spending,” the release stated. “Combined, these are at the heart of the current economic disruption.”

Chesterfield has been working to revise its budget proposal for the coming fiscal year in light of the changing numbers. Casey said Tuesday that the furloughs would help in offsetting such shortfalls, while helping the county retain its more than 4,000 full-time employees.

“We’re trying to rebalance our proposed budget to what we think the next fiscal year’s going to bring us in revenues, and we’re trying to preserve our full-time workforce as much as possible, to be as productive as possible over the course of the next year,” he said.

The county planned to post a revised budget proposal on its website this Friday, with presentations via Facebook Live scheduled next Monday and Tuesday at 7 p.m. County supervisors are scheduled to vote on the budget April 22.

As originally presented in mid-March, Chesterfield’s budget for fiscal year 2021 was to total $1.52 billion, up from this year’s $1.43 billion plan, and would have maintained the current real estate tax rate of 95 cents per $100 of valuation.

It included a $773.2 million general operating fund and a 2 percent merit-based salary increase for county employees, both of which could now change. The budget also was to start laying a framework for a $600 million bond referendum to address capital needs in the next decade, and putting resources in place to begin work on a fourth water source for the county.

Whatever changes are made in the revised budget, Casey said they would not involve adjustments to tax rates.

“I’m of the mindset during these economic conditions that anything that involves tax rate changes, or any type of rate changes as an increase, is not helping the citizens or businesses,” he said.

Regional freeze

In addition to the furloughs, Chesterfield’s counter measures include putting a stop on discretionary expenditures and freezing all department budgets – moves that other governments in the region likewise are making.

The Henrico County administration building. (BizSense file photo)

Henrico County put a freeze on more than 310 full-time positions that are currently vacant and will remain unfilled, County Manager John Vithoulkas said. Vithoulkas said he and Casey, and their peers in the region, have been in regular communication and generally are taking similar actions, though he acknowledged Chesterfield’s furloughs go a step further.

He said Henrico is likewise eliminating the use of temporary workers and significantly reducing its part-time workforce amid its hiring freeze. At the same time, he noted various programs that both counties are undertaking to support their respective business communities, such as initiatives to support area restaurants in particular.

Henrico is buying meals from restaurants in the county whose dining rooms have been closed to feed public safety workers and other employees responding to the pandemic, while Chesterfield has launched a website to connect citizens with restaurants providing take-out or delivery service. Both counties also are offering tax relief measures to support businesses and residents.

John Vithoulkas

John Vithoulkas

“There are immediate budgetary controls that have been put into place literally overnight,” Vithoulkas said. “But the flip side is also tax relief for the businesses that have been most impacted, so that they may have one less thing to worry about as we come out of this crisis, which we will.”

Henrico also is revising its proposed budget, with a presentation to supervisors targeted for mid-April. The board is scheduled to vote on the revised plan April 28.

While those discussions are ongoing, Vithoulkas said that as of now, Henrico is not eyeing any furloughs or layoffs for its roughly 4,000 full-time employees. He said a proposed 3 percent merit-based raise for employees would be scrapped, among other restrictions on expenditures.

Henrico’s original proposal totaled $1.4 billion, an increase of 5.5 percent from the current year’s budget. The proposal was to retain the current real estate tax rate of 87 cents per $100 of valuation and included a general fund totaling $962.5 million, an increase of 4.8 percent.

The plan also provided $142.7 million for capital projects in fiscal year 2021, including an addition to Hungary Creek Middle School, a new elementary school near the River Mill development and a new South Station for police. While those projects would be put on hold, Vithoulkas said other projects already funded and underway would continue, in part to further assist the business community.

“The approach is, Henrico is one of the region’s largest employers, so we understand that anything we do is going to have an impact on the business community. It’s not as simple as you only look out for the governmental realm; you have to look at the whole community,” Vithoulkas said.

“That is why we have a number of growth projects and construction projects that will continue, because through those projects, which have already been accounted for, we are providing companies with the ability to hire for X number of jobs, and that is important.”

Vithoulkas said Henrico faces the economic challenges ahead in a relatively good position, having previously refinanced all of the public debt that it could to take advantage of low rates, and with $50 million in increased revenue projected this year over the previous fiscal year.

“I feel more confident about managing the fiscal side of this crisis than the other side,” he said, referring to the unknowns of the public health crisis.

The City of Richmond also is reworking its projections, both for next fiscal year and the remainder of the current year. Administration spokesman Jim Nolan said the city also is freezing hires and has no plans for furloughs or layoffs at this time.

The Chesterfield County Administration Building at 9901 Lori Road. (BizSense file photo)

As area localities revise their fiscal budgets amid plummeting revenues and grim economic forecasts, one local government is going a step further in its response to the coronavirus, furloughing hundreds of employees indefinitely.

In a release distributed late Monday afternoon, Chesterfield County said it will furlough more than 500 part-time and full-time employee positions effective this Saturday, as part of its efforts to weather the financial impacts of COVID-19.

Employees were notified of the furloughs last week, according to the release, which said roughly 10 percent of the affected positions are currently vacant. Furloughed employees are eligible for unemployment and six months of county-paid health and dental benefits.

Joe Casey

County Manager Joe Casey clarified Tuesday that the bulk of the positions are part-time employees working 30 hours or less who receive benefits, as well as programmatic and seasonal employees across various departments. He said about 15 of the employees are full-time positions, some of which may involve resignations or retirements.

The furloughs come amid various responses by local governments to stem the tide of coronavirus impacts to current and proposed operating budgets. Chesterfield said 40 percent of its revenues are tied to consumer behavior such as retail sales and travel, both of which have nosedived amid response to the pandemic.

“Included in that percentage is the county’s dependence on state revenues which are tied directly to employment and spending,” the release stated. “Combined, these are at the heart of the current economic disruption.”

Chesterfield has been working to revise its budget proposal for the coming fiscal year in light of the changing numbers. Casey said Tuesday that the furloughs would help in offsetting such shortfalls, while helping the county retain its more than 4,000 full-time employees.

“We’re trying to rebalance our proposed budget to what we think the next fiscal year’s going to bring us in revenues, and we’re trying to preserve our full-time workforce as much as possible, to be as productive as possible over the course of the next year,” he said.

The county planned to post a revised budget proposal on its website this Friday, with presentations via Facebook Live scheduled next Monday and Tuesday at 7 p.m. County supervisors are scheduled to vote on the budget April 22.

As originally presented in mid-March, Chesterfield’s budget for fiscal year 2021 was to total $1.52 billion, up from this year’s $1.43 billion plan, and would have maintained the current real estate tax rate of 95 cents per $100 of valuation.

It included a $773.2 million general operating fund and a 2 percent merit-based salary increase for county employees, both of which could now change. The budget also was to start laying a framework for a $600 million bond referendum to address capital needs in the next decade, and putting resources in place to begin work on a fourth water source for the county.

Whatever changes are made in the revised budget, Casey said they would not involve adjustments to tax rates.

“I’m of the mindset during these economic conditions that anything that involves tax rate changes, or any type of rate changes as an increase, is not helping the citizens or businesses,” he said.

Regional freeze

In addition to the furloughs, Chesterfield’s counter measures include putting a stop on discretionary expenditures and freezing all department budgets – moves that other governments in the region likewise are making.

The Henrico County administration building. (BizSense file photo)

Henrico County put a freeze on more than 310 full-time positions that are currently vacant and will remain unfilled, County Manager John Vithoulkas said. Vithoulkas said he and Casey, and their peers in the region, have been in regular communication and generally are taking similar actions, though he acknowledged Chesterfield’s furloughs go a step further.

He said Henrico is likewise eliminating the use of temporary workers and significantly reducing its part-time workforce amid its hiring freeze. At the same time, he noted various programs that both counties are undertaking to support their respective business communities, such as initiatives to support area restaurants in particular.

Henrico is buying meals from restaurants in the county whose dining rooms have been closed to feed public safety workers and other employees responding to the pandemic, while Chesterfield has launched a website to connect citizens with restaurants providing take-out or delivery service. Both counties also are offering tax relief measures to support businesses and residents.

John Vithoulkas

John Vithoulkas

“There are immediate budgetary controls that have been put into place literally overnight,” Vithoulkas said. “But the flip side is also tax relief for the businesses that have been most impacted, so that they may have one less thing to worry about as we come out of this crisis, which we will.”

Henrico also is revising its proposed budget, with a presentation to supervisors targeted for mid-April. The board is scheduled to vote on the revised plan April 28.

While those discussions are ongoing, Vithoulkas said that as of now, Henrico is not eyeing any furloughs or layoffs for its roughly 4,000 full-time employees. He said a proposed 3 percent merit-based raise for employees would be scrapped, among other restrictions on expenditures.

Henrico’s original proposal totaled $1.4 billion, an increase of 5.5 percent from the current year’s budget. The proposal was to retain the current real estate tax rate of 87 cents per $100 of valuation and included a general fund totaling $962.5 million, an increase of 4.8 percent.

The plan also provided $142.7 million for capital projects in fiscal year 2021, including an addition to Hungary Creek Middle School, a new elementary school near the River Mill development and a new South Station for police. While those projects would be put on hold, Vithoulkas said other projects already funded and underway would continue, in part to further assist the business community.

“The approach is, Henrico is one of the region’s largest employers, so we understand that anything we do is going to have an impact on the business community. It’s not as simple as you only look out for the governmental realm; you have to look at the whole community,” Vithoulkas said.

“That is why we have a number of growth projects and construction projects that will continue, because through those projects, which have already been accounted for, we are providing companies with the ability to hire for X number of jobs, and that is important.”

Vithoulkas said Henrico faces the economic challenges ahead in a relatively good position, having previously refinanced all of the public debt that it could to take advantage of low rates, and with $50 million in increased revenue projected this year over the previous fiscal year.

“I feel more confident about managing the fiscal side of this crisis than the other side,” he said, referring to the unknowns of the public health crisis.

The City of Richmond also is reworking its projections, both for next fiscal year and the remainder of the current year. Administration spokesman Jim Nolan said the city also is freezing hires and has no plans for furloughs or layoffs at this time.

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David Humphrey
David Humphrey
2 years ago

Even if they are almost all part-time jobs I think this sends a very “panicky” message to the public. I also find it sad that Chesterfield has not saved up enough to pay these people for at least a couple of months.

Matt Faris
Matt Faris
2 years ago
Reply to  David Humphrey

I thought so as well, but some government programs are practically irrelevant right now. Libraries come to mind. Several Community Development Departments are closed to the public, like Planning. This makes a real difference when trying to get plans submitted, approved and accepted. It took until today to even publish a policy on how to finally submit new plans, starting next week. Our neighboring county to the north has been far easier to navigate, thus far.

Garry Whelan
Garry Whelan
2 years ago
Reply to  David Humphrey

If the county had ‘at least a couple of months’ cash ‘saved up’ they would be harangued for being flush and not spending those tax dollars on citizens. Imagine the response to ‘we’re saving for a pandemic’?
Also, given the lack of plans at state and federal level, why do you think a county would have several months of wages on hand for something so unprecedented in modern times?
40% of county revenue is dependent on retail and travel – they have gone.
Seems a reasonable response given the situation.

David Humphrey
David Humphrey
2 years ago
Reply to  Garry Whelan

Every locality/state should have a rainy day fund. It helps to balance the budget whenever there is something unusual that comes up (pandemic, recession, whatever). It is actually something agencies look for when giving bond ratings. So 40% is affected (not gone bc that includes groceries and such) and it affects 1/4 of the year. So at most 10 % of revenue is gone for this year. With all the other programs that you do not have non-wage expenses for they should be able to find room in their budget or money from their rainy day fund to make up… Read more »