City out­lines re­cov­ery plan

Bobb out­lines com­ing days in fi­nan­cial turn­around

The Progress-Index Weekend - - FRONT PAGE - By John Adam Staff Writer

PETERS­BURG — With their con­tract re­newed un­til Septem­ber, the Robert Bobb Group is look­ing to con­tinue to help move the city out of its fi­nan­cial hole. Though some progress has been made, chal­lenges re­main.

“We’ve made some tremen­dous progress, but we’ve got to let the re­al­ity sink in across the en­tire city that there is a prob­lem, and it’s go­ing to re­quire some hard re­struc­tur­ing de­ci­sions,” said Robert Bobb.

This re­al­ity is still be­ing felt in sev­eral ar­eas. The city strug­gled to fund des­per­ately needed fire and po­lice ve­hi­cles. Be­cause of their low credit score (a “BB” with a neg­a­tive out­look) the city can­not ob­tain loans on cap­i­tal mar­kets. The city was forced to look for pri­vate fi­nanciers to put up the $2.8 mil­lion nec­es­sary to buy the ve­hi­cles.

“We should not have reached that point of des­per­a­tion,” said Bobb.

The re­cent sale of the Peters­burg Ho­tel also fell through, though the rea­sons why are un­clear. Of­fi­cials are hop­ing the deal is re­worked in the up­com­ing weeks.

Though steps have been made, the city’s fi­nan­cial woes are not go­ing away any­time soon. Of­fi­cials have stated that the house is still on fire, and the city still faces key de­ci­sions that will shape its fu­ture.

Bobb and In­terim City Man­ager Tom Tyrrell talked ex­ten­sively about what they called the “five pil­lars” of a healthy city. Po­lice ser­vices, fire pro­tec­tion, emer­gency med­i­cal ser­vices, pub­lic schools, and good fi­nan­cial poli­cies all con­trib­ute to the health of a lo­cal­ity. The com­bi­na­tion of these five fac­tors, when strength­ened, will make Peters­burg more at­trac­tive to busi­nesses and po­ten­tial new res­i­dents, they said.

Cur­rently in phase two of their turn­around plan, the Robert Bobb Group has worked through some of the tougher fi­nan­cial is­sues that the city had to re­solve

be­fore mov­ing for­ward. Phase one en­com­passed more of the short -erm fi­nanc­ing that the city des­per­ately needed at the end of last year. This in­cluded se­cur­ing an un­con­ven­tional Rev­enue An­tic­i­pa­tion Note (RAN) loan to as­sist with cash flow, and nec­es­sary pay­ments needed for things like city pay­roll. The city com­pleted fis­cal year 2016 over bud­get, with a sig­nif­i­cant de­cline in its rev­enue base. Changes were made to the cur­rent 2017 fis­cal year bud­get to bring it into bal­ance, but the bud­get might have to be amended again to make sure that bal­ance is achieved.

“The prob­lem that we’re hav­ing cur­rently is that the rev­enues aren’t com­ing in as we had an­tic­i­pated,” said Bobb. “Be­tween now and June 30, we still might need to make some dras­tic mea­sures to bring the 2017 bud­get into bal­ance.”

Phase one ended in March. The main fo­cus of the sec­ond stage is sta­bi­liz­ing many of the gov­ern­ment pro­cesses that had run amok over past ad­min­is­tra­tions, while es­tab­lish­ing a path to long-term fi­nan­cial sta­bil­ity. The bud­get pro­posed by the Bobb Group for the up­com­ing fis­cal year con­sol­i­dates and stream­lines sev­eral de­part­ments and pro­cesses, mak­ing the sys­tem more co­her­ent and ef­fi­cient. When go­ing through the city’s tan­gled fi­nan­cial books, In­terim Fi­nance Di­rec­tor Nelsie Birch found many ex­am­ples of criss­crossed spend­ing, such as the city hav­ing mul­ti­ple ven­dors for things like copy ma­chines and se­cu­rity cam­eras. Changes were made to sev­eral de­part­ments, like the re­or­ga­ni­za­tion of Parks and Leisure into the De­part­ment of Leisure and Cul­tural Af­fairs. Long-stand­ing is­sues in emer­gency ser­vices were ad­dressed in­clud­ing the pay cut that was im­ple­mented in April of 2016 for all city work­ers. The cut was re­stored be­gin­ning last month for emer­gency work­ers.

“Once the pay cut was im­ple­mented, we lost of­fi­cers to other lo­cal­i­ties,” said Bobb. “Those who were trained [for Peters­burg] left.”

The new bud­get also brings up the min­i­mum salary of emer­gency work­ers to make it com­pet­i­tive with neigh­bor­ing lo­cal­i­ties.

Though the bud­get is con­ser­va­tive, both the City Coun­cil and the Bobb Group an­tic­i­pate im­prove­ments in col­lec­tion rates, which have gone up over re­cent months. Pub­lic Works Di­rec­tor Em­manuel Adedi­ran said the util­ity billing col­lec­tion rate for April went up to 88.05 per­cent, a dras­tic im­prove­ment from the 70 per­cent rate the city was ex­pe­ri­enc­ing in the past.

“The city’s ma­jor chal­lenge go­ing for­ward will be the abil­ity to bill and col­lect,” said Bobb.

Over the past sev­eral years, col­lec­tion of taxes and util­ity bills has been spotty at best, with res­i­dents re­port­ing in­ac­cu­rate billing state­ments on their wa­ter bills, or even not get­ting billed at all for months at a time. This has di­rectly af­fected the city fi­nances, as money is not flow­ing through the city’s bank ac­count as it should. Back in Fe­bru­ary, the Trea­surer’s of­fice came un­der fire when stacks of un­pro­cessed checks were dis­cov­ered in the of­fice. Trea­surer Kevin Brown de­cided not to run for re­elec­tion this year, mean­ing the of­fice will un­dergo sig­nif­i­cant changes.

Mem­bers of City coun­cil and the Bobb Group have stressed the need for a “cul­ture change” where billing is more or­ga­nized, and though it may be un­pop­u­lar, when money goes un­col­lected ser­vices get shut off. Al­though many of these sorts of prob­lems can be traced to the wa­ter me­ter fi­asco with John­son Con­trols in 2015 (a con­tract the Bobb Group says is be­ing in­ves­ti­gated), the fact re­mains that the city has not col­lected delin­quent fees for wa­ter bills in sev­eral years.

“We have to cre­ate a cul­ture where if you don’t pay you’re go­ing to get shut off,” said Bobb.

Still on the agenda in phase two is ex­ten­sive ac­tions to mod­ern­ize the city work­force, and to de­velop Stan­dard Op­er­at­ing Pro­ce­dures for a bet­ter man­aged gov­ern­ment. This in­cludes the hir­ing of a per­ma­nent city man­ager, deputy city man­ager, po­lice chief, and fi­nance di­rec­tor, which the city is in the process of do­ing now.

“If you don’t have fi­nan­cial vis­i­bil­ity, you’re fly­ing blind,” said Tyrrell. “We need to get a team in there that can give us that vis­i­bil­ity.”

Once the bud­get gets passed and the 2018 fis­cal year be­gins, the fo­cus will turn to de­vel­op­ing a longterm fi­nance plan that will be fol­lowed af­ter the Bobb Group leaves in Septem­ber. Cap­i­tal im­prove­ment projects will specif­i­cally be looked at, es­pe­cially in re­gards to the on­go­ing saga with the wa­ter sys­tem.

Though not orig­i­nally in­cluded in the Bobb Group’s con­tract, the wa­ter sys­tem has be­come a hot but­ton is­sue the past sev­eral months, as the city cur­rently needs over $90 mil­lion to up­grade its sys­tem and make nec­es­sary pay­ments to the Ap­po­mat­tox Re­gional Wa­ter Au­thor­ity. With Aqua Vir­ginia and Vir­ginia Amer­i­can Wa­ter hav­ing both bid to buy the sys­tem, there is de­bate as to whether the city will sell it or not.

Sell­ing it would put ei­ther com­pany in charge of wa­ter billing and main­te­nance, negat­ing the city’s need to come up with the money. Though the com­pa­nies would also be in charge of the wa­ter rates, a point of is­sue with those against the sale. The City Coun­cil ap­pointed a spe­cial ad hoc com­mit­tee in Fe­bru­ary to an­a­lyze the sys­tem, and rank al­ter­na­tives to pri­va­ti­za­tion. They are sched­uled to re­lease their rec­om­men­da­tion in July.

Out­side of the wa­ter sys­tem, new com­puter pro­grams are be­ing im­ple­mented to help mod­ern­ize the pub­lic works de­part­ment. One of those, Ci­tyWorks, is set to launch in the up­com­ing months. Ci­tyWorks will pro­vide a way for all pub­lic works projects to mapped out, and ci­ti­zens can go on and trace the ex­act fund­ing for each project.

“What we’re do­ing with OpenGov and Ci­tyWorks is con­nect­ing the fund source for all that pub­lic works stuff, and mak­ing it so that you can tie it back, and see how much is spent,” said Dileep Ra­jun, a data an­a­lyt­ics spe­cial­ist.

The new track­ing meth­ods us­ing OpenGov and Ci­tyWorks will pre­vent money be­ing used on projects that it wasn’t al­lo­cated to, a prob­lem that played a big role in the city’s fi­nan­cial de­cline. The city had ac­tu­ally pur­chased the sys­tems sev­eral years ago, but are only now in the process of im­ple­ment­ing them. The com­pany that cre­ates Ci­tyWorks is let­ting the city use it for free through 2018.

“What we’re im­ple­ment­ing in­creases trans­parency of gov­ern­ment and en­gage­ment,” said city spokesper­son Clay Ham­ner. “It makes gov­ern­ment run more ef­fi­ciently and ef­fi­ciency means lower cost.”

As the Robert Bobb Group moves into the last months of their con­tract, they hope to leave be­hind a sta­ble city en­vi­ron­ment with sound fi­nan­cial poli­cies in place. Though de­ci­sions will still have to be made once they leave, they hope the city will be bet­ter equipped to han­dle its fi­nances.

“We can say we want to have a struc­turally bal­anced bud­get,” said Tyrrell. “But if we don’t live it, it doesn’t mean any­thing.” — John Adam may be reached at jadam@ progress-in­ or 804-722-5172.

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