Petersburg City Council ended a difficult year Tuesday night with a financial lecture from consultants, pointed comments from residents, a vote toward privatizing the city’s water systems and a vote for a ballot referendum.
The Robert Bobb Group, brought in as a turnaround consultant in October for a $350,000 fee, delivered a presentation on debt refinancing, the sale of assets and government transparency.
“A little commercial,” said Robert Bobb during his presentation. “If there’s anyone out there who’s a C.P.A. or an accountant, we’re looking to fill those positions in the city.”
Budgetary mismanagement going back to 2009 culminated when city leaders revealed earlier this year that Petersburg was $18 million in debt and had a shortfall of $12 million for the coming fiscal year. Large cuts to city services and a 10-percent pay decrease for city employees led to voter discontent and a staff exodus.
In a presentation by the Bobb Group, the acting city manager, Tom Tyrell, promised to fix the pay cut. “By March we believe we’ll be in a situation where we will have achieved financial stability,” he said. “We will present at the second meeting in March a balanced budget … with an emphasis on public safety and public education.”
City Treasurer Kevin Brown started the meeting with a delinquent collection report. In addition to overspending, state officials, auditors and now the consultant group have pointed to tax and bill collections as not reconciling with revenue projections. As of the end of November, Brown said, the city had collected another $1.4 million in delinquent taxes, but $2.7 million of real estate taxes and $3.3 million of property taxes were still outstanding.
Bobb highlighted cuts with unintended consequences that council made in recent months. An $89,000 cut from the Department of Social Services, for example, resulted in a $625,000 loss from the state in reimbursement.
A residents’ group presented proposed amendments to the city charter and recommended a clear delineation of mayoral responsibilities. They also suggested adding the city manager and finance director to the ranks of those who could demand to see the city accounts.
Council member Treska Wilson-Smith called for a vote to decide whether to include a referendum on the November ballot asking if residents wanted to vote for their own mayor. Petersburg council currently elects the mayor and vice-mayor from its own ranks. The motion passed with six ayes and one abstention from Darrin Hill of Ward 2.
Bobb defended a controversial city-owned golf course, Dogwood Trace, saying it pays for its own operating costs, and he recommended the sale of unused city assets and properties. Around 312 parcels had an assessed value of $19.4 million, and he outlined a plan to sell those off.
Bobb and Tyrell asked council to consider the unsolicited bid from Aqua Virginia, a private company, to buy the city’s water and wastewater systems. They noted it was “an asset the city cannot maintain or manage” with twice the national average of leaks.
Council unanimously passed a proposal to put up for sale and for the Robert Bobb Group to pursue offers on its behalf.
Bobb also recommended more transparency and that council convene with the public on the “tough choices we have to make” in order to “turn the volume down somewhat.”
Acting director of finance and budget Nelsie Birch, also brought in by the consultancy, presented council with a plan to refinance the $20 million still owed to vendors. A recent $6.5 million loan from the state ensured payroll for the remainder of 2016, but Birch warned of an upcoming January conversation where they would need “to right-size the budget.”
Birch highlighted structural issues such as an unclear division of responsibilities between the treasurer, the commissioner of revenue and the director of finance.
“For me as finance director, if I want to cut something, I’m almost doing it after the fact,” she says. “[Vendors have] already done the service or given us the goods. We need to catch it before it gets to that process, before an agency gets to the point where they’re buying something.”
To better understand sources of revenue and what they fund, Birch recommended financing software that costs $15,000 annually and $7,000 transparency software which reconciles data and allows public oversight of budgeting.
“There’ll be a couple months where it’s really, really painful,” she said. “But I promise you it will restore confidence in things where it’s been lost.”
Several residents spoke in support of the former chief of police, John Dixon, who was dismissed in June by then interim city manager Dironna Belton. They and others described the gun violence in the city as escalating.
“With the dough boys around, he had them under control. He spoke their language,” said Gloria Brown of Dixon. “Now it’s open season.”
Marlow Jones, a city employee who ran an unsuccessful council race this year against Hill, questioned the crime statistics reported by the city. “I don’t know where you’re getting these numbers,” he says. “Crime is not at an all time low. Spirits are low. Transparency is at a low.”
State Sen. Rosalyn Dance, a Petersburg resident who represents the city in the General Assembly, stood up to say she was “concerned about where my tax dollars are going.” She also noted she had yet to see an agenda from the city for the legislative session starting in January.
Ron Flock asked that council “carefully consider who you make mayor and vice-mayor” in 2017, and Barb Rudolph suggested council members Treska Wilson-Smith and John Hart as leaders.
After public comment, two long-time council members, who did not seek re-election this year, Brian Moore of Ward 4 and David Coleman of Ward 6, received plaques from the mayor to tepid applause.