Disgraceful

Richmond City Hall

Richmond City Hall

by James A. Bacon

Fiscal Year 2015 in Virginia came to a close yesterday but the City of Richmond still had not filed its Comprehensive Annual Financial Report (CAFR) for FY 2014, reports the Richmond Times-Dispatch. The report provides an audited overview of revenues, spending, assets and debts critical to appraising a locality’s financial condition.

The City of Richmond is one of only three localities still to have failed to issue the report, the filing deadline for which was seven months ago. With a population of 218,000, Richmond is by far the most populous of the three, which includes poverty-stricken Wise County (pop. 40,000) and the town of Dumfries (pop. 5,100).

“A ten-month delay for something that should be a basic function of government is unconscionable,” said City Councilman Jonathan T. Baliles. “This is what happens when you ignore the fundamentals of government.”

City officials, reports the TD, have cited employee turnover, a lack of training and challenges in implementing a new financial system as reasons for this year’s delay. In other words, city officials blame dysfunctional management.

The problems did not materialize overnight, however. The city issued emergency procurement documents for outside help from an independent consultant to ensure timely completion of the 2013 CAFR. Payments to that consultant have risen from an anticipated $95,000 to $295,000 under  March contract extension.

Shortly thereafter, the city’s auditing firm, Cherry Bekaert, fired the city as a client. According to the TD, partner Eddie Burke cited “a high-risk, dysfunctional working environment that ‘has continually gotten worse every year.'” Ask yourself: How bad did the situation have to be for a midsize CPA firm to turn down a $320,000 annual contract?

Bacon’s bottom line: As Baliles says, balancing the books is fundamental. Add this failure to a string of other spending and administrative scandals over the past few years, and it seems pretty clear that government in Virginia’s capital city is a mess. It wasn’t always this way. Long-time residents remember when Robert C. Bobb ran the city in the 1980s as one of the most effective city managers in the country.

Ultimately, it is the responsibility of one person — the mayor — to ensure that the city functions properly. While Mayor Dwight C. Jones is good at striking the right rhetorical chords on a variety of issues, he has proven ineffectual as an executive.

I admire Jones’ response to the controversy over the Confederate flag and other symbols of the Confederacy, including the statues along Monument Avenue. “Rather than tearing down,” he said recently, “we should be building up in ways that establish a proper sense of balance and fairness by recognizing heroes from all eras to tell a richer and more accurate story of Virginia’s history.” Those are the words of a uniter and a healer, not a divider.

But I’m concerned that Jones doesn’t have much interest in the nuts and bolts of government. Perhaps that is understandable considering that he has divided his time between his responsibilities as mayor, Senior Pastor of First Baptist Church and for a year, chairman of the Democratic Party of Virginia. But when he does focus on his mayoral duties, instead of making sure the trains run on time, Jones has promoted high-profile projects like the Shockoe Bottom baseball stadium, the Washington Redskins training park and the World Road Cycling Championship.

Private investors are pouring money into the city. What most of them want to see, however, isn’t wheeling and dealing that rewards a privileged few. They want to see a city that does the things that cities are supposed to do. Like close out the books on time.

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18 responses to “Disgraceful

  1. The real problem that might arise from this is the rating agencies.If they find that the numbers do not add up it will result in higher borrowing costs that would have an unfavorable result for all involved

  2. It would seem that the Mayor needs a highly competent, tough as nails Executive Officer who insures that Richmond’s trains run on time, while the major is off doing what he does best.

    Of course, and particularly in such cases as these, one hopes that there is not a scandal lurking in the numbers that are having such a hard time reaching into the daylight of public scrutiny.

  3. “Poverty-stricken” Wise County has a poverty rate of 22 percent, slightly lower than the City of Richmond’s poverty rate of almost 26 percent.

    I don’t mean to suggest that the city should be excused for its dysfunction. But the way the term “poverty-stricken” is used for Wise County infers a relationship and explanation for its late audit. That same logic isn’t extended to the jurisdiction with more residents in poverty than Wise County’s entire population.

    If “poverty-stricken” is a standard you’re using to weight the performance of municipalities, then surely Richmond qualifies.

    • Fair comment. I thought about that very concern when I wrote “poverty stricken.” Here was my thinking: Richmond has a large population of poor people. But it also has a very large professional and business class. To my mind, one would expect Richmond citizens to expect and demand higher standards of governance. I find absolutely no excuse for the City of Richmond’s performance. It’s disgraceful.

      That doesn’t mean I’d like Wise County off the hook. Buchanan, Dickenson, Tazewell and other nearby counties are just as poor but they somehow managed to get the job done.

  4. Is this the Virginia Auditor report for localities or something else?

    the article is not clear about what this is…

  5. Is anyone else not getting email notifications of new comments?

    I might have to create a new ID.

  6. test test test test

  7. The comment about wise county is a very clear example of richmond-based arrogance

  8. Still not sure if this is the APA required reporting or something else but every year – several localities miss the date. Sometimes it’s the smaller counties with slim resources but sometimes it’s bigger localities. I believe the Stafford county missed one year recently.

  9. Cut their school appropriation 1 percent if they miss the deadline. They won’t miss any more.

  10. “I’m concerned that Jones doesn’t have much interest in the nuts and bolts of government.”

    That’s because he doesn’t. At all. Unless it’s interceding on behalf of some business that would like to come to Richmond and have the taxpayers help foot the bill it doesn’t seem like Jones or his administration can be bothered.

    I think this is the first time I’ve seen Baliles say something even remotely critical of Jones. Maybe he’ll become a real boy one day after all.

    “and the World Road Cycling Championship.”

    I could be misremembering, but I’m almost certain City Hall had very little to do with getting the 2015 cycle race in Richmond other than whatever official paperwork had to be filled out.

  11. There are folks below the Mayor that are screwing up. You can make the case for a county with limited resources – perhaps one person doing budgeting … in some of the smaller counties but larger jurisdictions have entire offices doing this work – and the folks in charge of those operations – multiple folks in the hierarchy are remiss – and the Major for being asleep at the switch.

  12. Councilman Baliles joins a great many people, including, no doubt, leadership in City Hall, in knowing there is a gap in capabilities when a fixed asset and investment wealth report (the CAFR) is not produced in a timely manner. CAFR is a municipal strategic road map, not the routine annual cost report of costs and taxes, therefore, the cost of inaction is higher than usual. But, lack of public-sector productivity is a tired topic with the usual rude solution: naming and shaming. Wouldn’t it more interesting to also get the read of the newly appointed (as in last month) Deputy Chief Administrative Officer for Finance and Administration in this piece about negative marginal production? Think: The American Congress has not passed a proper budget on time since 1997. Maybe its time to dampen the contempt and look for solutions to more than an organizational crisis: to look at the crisis of ideas in the management of the public sector.

    • Betty, you make an interesting point. If there are systemic issues that need to be addressed, please do elaborate.

      My concern is that the systemic issue in the City of Richmond is an organizational culture of lassitude. Maybe the new CAO can change that, but I wouldn’t count on it. CAOs come and go. The bureaucracy lives forever.

  13. First: task shifting that is transparent – who owes what – besides the buck always rightly stopping at the top.
    Second: Encourage “mutant ideas” from the population without the usual market access that is usually only accessible to citizens with a lot of money or a lot of skill. After all, if GE admits getting 50% of its new ideas from direct feed from consumers – why is government not walking that walk?
    Third: Financial reporting that provides the percentage of revenue that is available for discretionary spending – to give an index of how much mandatory programs are eating up the seed corn and what to do about that.
    Fourth: Get over the assumptions that a public institution is better when uniform. The cult of conformity is depressing if it leads to attitude and experience that imposes “never do anything for the first time.” It is typical that the only thing that can get you fired is innovation.
    Lastly, yep. CAOs come and go. So do Mayors.

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