Bacon's Rebellion

Democracy Thrives in Sunlight

Petersburg Now Has a Plan. Does It Have the Will?

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by

James A. Bacon
in ,

Robert Bobb, of the Robert Bobb Group, outlines a five-year financial plan for Petersburg.

The Robert Bobb Group, a consulting firm hired to straighten out the city of Petersburg’s finances, has outlined a five-year plan to keep the city on the fiscal straight and narrow. Among the 15 recommendations is creation of a Financial Advisory Board tasked to make monthly reports on the budget and ensure that financial policies and procedures are being followed, reports the Progress-Index.

The board, comprised of individuals credentialed in finance and accounting, along with a newly created position of Internal Auditor, would give City Council independent insight into what’s happening in city government.

The Bobb Group report also recommended selling the city water system’s excess water capacity or privatizing the utility entirely, and disposing of parcels of city-owned real estate properties, including the Petersburg Hotel and the old Ramada Inn. Converting those properties to cash would help rebuild the city’s fund balance, which currently stands at negative $7.7 million.

The city, which experienced a $12 million budget gap last year and faced $19 million in unpaid bills, narrowly averted a default on its debt. The Bobb Group,  which assumed extraordinary budget powers in a $520,000 contract, rescued the city from insolvency. Among other contributions, the firm claims to have identified more than $10 million in savings and avoided costs. But its contract has expired, the consultants are leaving, and City Council and the apparatus of city government are on their own again.

In their parting report, the Bobb Group listed steps that Council “must take” to keep finances on track. The consultants’ report urged the city to “continue to develop solid financial and business policies, practices and procedures.”

Changing the culture of city government will be easier said than done. A recently released forensic audit of city finances found extensive evidence of abuse of city money and resources in the run-up to fiscal disaster. Reports the Progress-Index in a separate article: “Included in these allegations of misconduct are: misappropriations of fuel for city vehicles, falsification of overtime hours, vacation/sick leave abuse, use of city property for personal gain including lawn mowers and vehicles for travel, excessive or lavish gifts from vendors, and questionable hiring practices.”

“The perception that employees had was that the ethical tone had not been good for quite some time,” said chief auditor John Hanson. “The culture led employees to do things they might not otherwise do.”

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6 responses to “Petersburg Now Has a Plan. Does It Have the Will?”

  1. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    This alone will not work as the last two paragraphs of article suggest. The city’s culture needs to change, and ways need be found to increase local prosperity.

    1. djrippert Avatar
      djrippert

      You know what will change the culture quickly?

      “Included in these allegations of misconduct are: misappropriations of fuel for city vehicles, falsification of overtime hours, vacation/sick leave abuse, use of city property for personal gain including lawn mowers and vehicles for travel, excessive or lavish gifts from vendors … ”

      Seeing some of the people who did these things walked out to police cars in handcuffs.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Good point, Don.

        Public servants of all sorts today now too often get a free ride for misconduct. This includes simple but chronic incompetence. And/or gross incompetence. And/or malfeasance, incl. chronic fraud, theft or reckless wastage. Much of this occurs by reason often of chronic and habitual acts, including such things as simple Lethargy On the Job.

        Indeed today far too many public servants simply refuse or have no interest in or motivation to do a good job. Or to do any job at all, if only by reason that no one in authority requires such standards, or has the practical means to do so.

        Indeed often such a state of affairs has been going on for so long that many public employees have lost the skills and motivation to work effectively. And why not? No one is held accountable. So nobody pays any price except the public that foots the bill and gets wastage and harm in return.

        Why do these peoples’ bosses, whether the public who elected them, or those public servants who employ them, simple look the other way? Has our culture and institutions now in many places reached such a low point of nearly irretrievable gross ineffectiveness. Places so corrupt and with standards of behavior and expectations so low, that those who should fix the misbehavior cannot even see the behavior as bad behavior, or work to prevent solutions. Or because such authorities may be doing the same kinds of things themselves or be indifferent to such problems given their own passivity or dependency or lack of effective tools or outside motivation, or interest in continuing the status quo. Or because of the penalties others within or outside the systems will impose on them if they act property, so they have given up themselves, even to the point that they couldn’t care less themselves, if only because the “system” couldn’t care less, or demands the all involved play along or be punished.

        Apparently the only way one, absent murder, can get in trouble these days is by uttering words that for whatever cause, or for no intelligible cause at all, jangle the emotions of certain other self identified kinds of fellow citizens.

  2. LarrytheG Avatar
    LarrytheG

    There’s not an absolute correlation between malfeasance and fiscal distress although fiscal problems can lead to good people leaving and attracting unprincipled.

    A loss of business can lead to a loss of jobs and in turn a loss of property value and tax revenues.

    This has happened to Detroit… Southwest Va .. and Puerto Rico and a ton of other small towns and counties that lost coal, textile, furniture, etc.

    The question is – how do you downsize a community that has suffered a loss to it’s tax base.

    If you listen to the Fire Fighters in Petersburg – they are predicting Armageddon if their dept is downsized… Ditto the Police, the water treatment folks, etc…

    Detroit is bulldozing homes and selling others for a dollar in new style of “homesteading”.

    What should Petersburg do?

    How much tax revenue have they lost?

    You can’t balance the books by playing with your rainy day funds.. you have to not spend more money than your tax revenues bring in. That’s the only way to reach a fiscally responsible status. You can sell your assets but that won’t help your operational deficit.

    Malfeasance is usually one-time theft – not a permanent siphon to your tax revenues…

    You have to make cuts.. in public safety, schools, and other services. If you don’t do that – then your creditors will no longer sell you anything on credit and everything will be on a cash-only basis.

  3. LarrytheG Avatar
    LarrytheG

    On the subject of one-time money and recurring money, in my own county, I have watched both the BOS and the School Board folks struggle to MAINTAIN a perspective of the difference – at budget time.

    they will see a shortfall in the budget and want to fill it with rainy-day/contingency money – even as the budget staff warns them that the shortfall is multi-year … not enough annual recurring revenues to cover the annual operating budget.

    The frustration of the professional staff is palpable .. and after watching this phenomena repeat itself over and over and especially so with newly elected, I have come to the conclusion that part-time elected people who are not educated in finance – simply do not understand the concept. There own personal finances probably suffer from the same problem. When a mortgage company tells them what is the max amount of mortgage payment they will allow – they probably do not understand the logic the mortgage company is using when they set that max number.

    Now.. the paid county or city managers almost surely know this and if they are saying something different from what the staff budget folks are saying or worse they have co-opted that staff to also lie.. then that jurisdiction is in trouble if none of the part-time elected really understand budgeting.

    And so.. this is not a fundamental failure of govt or the way that govt works. It’s like individuals and people own failures.. most people do not get into financial trouble or go bankrupt… ergo ..most jurisdictions do not either.

    So this is not a problem of govt … it’s a problem of bad governance which does occur … from time to time but is not some sign of all govt getting ready to fail because govt as a concept is flawed.

    That’s what needs to be kept in perspective when we gets these “Armageddon”-tinged tomes here.

    Further exasperating such issues is the fact that when a locality has such a failure…it’s usually not easily fixed… just as an individual bankruptcy does not clear up in a year or two.

    So .. I just do not buy the concept that govt is fundamentally flawed and pre-disposed to fail because it’s incapable of fiscally responsible operation.

    SOME local govts do FAIL. but the vast, vast majority do not ..never have.. and many carry AA and AAA credit.

    1. James A. Bacon Avatar
      James A. Bacon

      “So .. I just do not buy the concept that govt is fundamentally flawed and pre-disposed to fail because it’s incapable of fiscally responsible operation.”

      You’re arguing with straw men again. Who has suggested such a thing?

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