Committee advances ordinance to transfer $5.8 million for restitution payments; debate centers on Affordable Housing Trust Fund uses

The Organizational Development Standing Committee on Aug. 25 voted to forward Ordinance 2025‑188 to the full Richmond City Council with a recommendation to approve, after a public hearing and extended debate among council members over the ordinance's source of funds and implications for the Affordable Housing Trust Fund.

Ordinance 2025‑188, as read into the record, would amend the FY‑26 special fund budget to transfer $5,800,000 from the Delinquent Tax Sale Special Fund and amend the FY‑26 general fund budget by creating a new line item for "restitution payments" and appropriating the transferred funds "for the purpose of providing funding for a restitution payment pursuant to Virginia Code section 8.01‑195.13." The ordinance was introduced at committee and a public hearing was held; a single speaker, Steve Salzberg of the First District, urged the council to follow the law governing delinquent tax sale proceeds and affordable housing.

Council discussion focused on two issues: the need to make the restitution payment and whether the city had complied with existing local code that directs certain delinquent‑sale proceeds or roll‑off/rehab tax abatement proceeds to the Affordable Housing Trust Fund. Several council members emphasized the "justice" rationale for paying restitution to a wrongfully convicted person; others raised concern that longstanding city code language requiring funds to flow to affordable housing had not been followed as the city received large one‑time and federal funds during the COVID period.

Vote and action: The committee voted to forward Ordinance 2025‑188 to the formal council meeting with a recommendation to approve. The committee vote, as recorded in the transcript, was: Aye — Mr. Bridal, Ms. Lynch, Ms. Trammell, Ms. Abubakar, Vice Chair Jordan, Chair Newbill; No — Ms. Gibson, Ms. Jones, Ms. Robertson. The motion passed and the ordinance will be brought to the full council for final action.

Why it matters: The ordinance would reallocate $5.8 million from a special fund created from delinquent tax sale activity to satisfy a restitution obligation established under state law. Council members and residents have argued for more transparent and enforceable treatment of funds designated — by code language in past ordinances — for the Affordable Housing Trust Fund. Several council members proposed forming a task group or drafting amendments to clarify code language so funds specified by statute or city code are reliably sent to the Affordable Housing Trust Fund going forward.

Clarifying details and next steps - Authority cited: Virginia Code §8.01‑195.13 is the statutory authority mentioned in the ordinance for restitution to wrongfully convicted persons. The ordinance is docketed as Ordinance 2025‑188. - Public comment: Steve Salzberg (First District resident) spoke in opposition, urging compliance with the law on delinquent tax sale proceeds. - Administration view: CAO O'Donnell said staff had prepared memoranda explaining the recommendation and that the delinquent tax sale fund appeared to be the appropriate source to protect general‑fund reserves; he also described the city's broader affordable‑housing investments from ARPA and other sources during recent years. - Council concerns: Multiple members asked for a broader review and potential amendments to the city code language governing the roll‑off and delinquent tax sales so future proceeds are consistently directed to the Affordable Housing Trust Fund. Councilmember Robertson said she would vote against the ordinance because she objected to reallocating funds that she and others consider dedicated to affordable housing; others said the restitution obligation must be satisfied and that administration had identified a legally available source.

Outcome and documentation: The committee moved the ordinance to formal council with a recommendation to approve and with directions from members that staff and council leadership prepare follow‑up work — including a review and possible amendment of code language and a report on the Affordable Housing Trust Fund balances and roll‑off proceeds — before final council action.