Richmond presents $550 million FY26 capital plan; officials warn $300M courthouse would breach debt policy

Sabrina Joy Hogg, interim chief administrative officer for Richmond City, told the council the proposed fiscal year 2026 capital improvement plan (CIP) totals $550,000,000 and the five‑year plan totals about $2.1 billion.

The plan, Hogg said, relies primarily on general obligation (GO) bonds, utility revenue bonds, pay‑as‑you‑go cash, prior appropriations and federal, state and regional grants. She warned that a $300 million to $350 million courthouse included in some discussions would violate the city’s debt policies and “be a mark against us on Wall Street.”

Why it matters: capital decisions made now can carry 20‑ to 30‑year repayment implications and affect Richmond’s credit ratings and interest costs. Hogg emphasized that rating agencies evaluate reserves, liabilities and demographic trends when setting credit ratings, and the city must weigh capacity versus affordability when authorizing long‑term debt.

Key elements of the FY26 proposal: transportation projects account for nearly half of the five‑year general capital total; school construction and renovation account for about 24%; capital investments such as affordable housing and park projects about 10%; capital maintenance another 10%; and a fully cash‑funded vehicle replacement program represents about 7%.

Hogg described several named projects included in the plan or under way: replacement of multiple fire stations and a police precinct; a $212.5 million program proposed for school construction and renovation (including a replacement school in FY29); continued funding for the Shockoe (listed in the CIP as the “Shockoe project”) interpretive campus and related facilities; and $427 million proposed for transportation enhancements including complete streets and Fall Line Trail elements.

Shockoe, Browns Island and Mayo Island: the CIP includes funding for a Shockoe project intended to memorialize Richmond’s role in the domestic slave trade. Hogg said the project earlier received $11,000,000 from the Mellon Foundation and $13.4 million from the state; the city proposes $10.1 million in GO bond funding in the FY26–30 plan. Browns Island improvements are budgeted at $6,000,000 in FY26 (with $4,000,000 already funded in FY25) toward a $30,000,000 estimated total, of which the city and Venture Richmond each would provide $15,000,000; the city has committed the remaining $5,000,000 contingent on Venture Richmond meeting its private fundraising goal.

Hogg also described a state grant of $7,500,000 the city received in 2023 to support purchase of Mayo Island; the grant requires demolition of existing buildings and surface parking within 36 months of signing the grant agreement or the funds must be returned. Nisa Richardson, deputy director of capital improvement for parks, told council the grant must be completed by October 2026 and that design and permitting work is already under way.

Utilities and BRIC funding: Scott Morris gave an update on a separate federal Building Resilient Infrastructure and Communities (BRIC) application. He said the city had been in the BRIC review process and was in a tentative selection phase in 2023 but ultimately was not awarded the $12,000,000. Morris said staff continue to discuss the outcome with federal representatives; council members asked staff to keep pushing to recover that funding. Hogg and Morris both said the $12 million had been factored into the city’s rate modeling as a potential offset but that the award was never finalized or signed, so the city has not actually received the funds.

Debt, reserve and credit considerations: Hogg walked council through debt capacity, credit‑rating drivers and the city’s reserve targets. She said Richmond’s reserve policy aims for a combined unassigned fund balance and downturn reserve of 20% and that the city remains below generally recommended reserves. She warned that adding the courthouse in the current financing plan would push the city past its policy limits (including a debt service ratio threshold) and could lead to downgrades by Moody’s or S&P, which would raise future borrowing costs.

Complete streets, fleet and facility maintenance: the FY26 CIP proposes $21,000,000 for the city’s Complete Streets program (about $16 million from GO bonds and $5 million in regional CVTA funds) and a $59.2 million proposed fleet replacement allocation (public safety vehicles and others). The capital maintenance program includes $5,000,000 planned for floodwall and levee work and $16.1 million for various facility upgrades; Hogg highlighted upgrades planned for the Richmond City Justice Center and other public safety facilities.

What officials said next: councilors pressed staff on how to handle the lost BRIC award and whether any projects could be delayed to absorb shortfalls. Vice President Jordan asked staff to identify projects that are not “shovel ready.” Hogg and other staff cautioned that some projects — for example demolition required for Mayo Island or federally required match deadlines — are time‑sensitive.

Where council goes from here: staff told council they will return with more details and that administration and federal liaisons are pursuing options related to the BRIC application. The presentation packet also includes links and slides tying projects to the Richmond 300 plan and to the city’s interactive CIP dashboard for project‑level status and contacts.

Ending: councilors used the presentation as a policy discussion on affordability, timing and priorities; staff highlighted where deadlines and grant conditions constrain schedule options and pledged to supply further details and scenario analyses for council review.