Harder Than It Looks

When Bacon's Rebellion caught up with Sara Carter, Appomattox County supervisor, she was driving this snappy yellow two-seater. She insists that she normally drives a "mom" car, but when she, her husband and kids start playing musical chairs with cars, she sometimes ends up with her husband's "midlife-crisis car."
When Bacon’s Rebellion caught up with Sara Carter, Appomattox County supervisor, she was driving this snappy yellow two-seater. She insists that she normally drives a “mom” car, but when she, her husband and her teenage children start playing musical chairs with cars, she sometimes ends up with her husband’s “midlife-crisis car.”

by James A. Bacon

Elected to the Appomattox County Board of Supervisors in 2013, Sara Carter enjoyed an edge over other newby supervisors when it came to learning the intricacies of local government — she also was serving as planning director for  Cumberland County not far away. An “exemplary” certification program provided by the Virginia Association of Counties (VACO) on open government and other legal aspects of the job was helpful. But when it came to deciphering government finances, she was largely on her own.

Carter and I chatted early this morning at a Sugar Shack (obscenely delicious doughnuts guaranteed to cut short your life expectancy) while she was in Chesterfield County for a VACO conference. She reached into a tote bag and pulled out two hefty documents, one a line-item budget, the other a copy of the Comprehensive Annual Financial Report. No one offers certifications for reading documents such as these that would make even a CPA’s eyes glaze over.

Our discussion was prompted by the travails of Petersburg City Council, which got blindsided by a massive backlog of unpaid bills and a budget deficit equivalent to roughly 20% of the budget. While steering clear of comment upon Petersburg’s woes or the performance of its council members, Carter emphasized the challenges of councilmen and supervisors of small towns and rural jurisdictions in Virginia.

For starters, the subject matter is forbiddingly complex, encompassing a wide array of disciplines — even for a College of William & Mary grad like Carter. It can take years for a novice to master the nuances  of everything from school funding, public works, water & sewer, public safety, and transportation, land use and community development.

VACO’s programs focus mainly on public policy issues and on keeping newbies from violating open-government laws, such as unwittingly discussing in private communications or chance encounters subjects that should be limited to a public forum. Those topics are important, Carter says, but newcomers need help on other subjects, too.

Second, part-time public officials have a limited amount of time to dedicate to understanding the numbers. Most members of the Appomattox board work for a living. She, too, has a full-time job, not to mention a marriage, three children and a small pig farm to occupy her attention. And when she is on the job, her time is often consumed by “micro” issues that get people stoked up but have minimal budgetary impact. “I can’t tell you how much time I’ve spent on the animal shelter,” she says. “Animal people are crazy!”

To understand local finances, elected officials typically rely upon presentations by city or county staff. The quality of staff varies widely in smaller localities. (She’s quick to sing the praises of Appomattox’s county manager.) Competent, ambitious managers often move to larger jurisdictions that pay better. “You have board members who don’t understand finance. They listen to staff – and the staff is often overwhelmed, too.”

Another source of advice comes from outside financial advisers such as Davenport & Co., a Richmond-based investment banking firm. While Davenport’s representatives are professional – she does not question their integrity – they do have a subtle bias. They make money by selling bonds, Carter observes. They don’t make policy recommendations on whether or not to sell bonds. But, she adds, “their job is to sell a product.”

When she joined the Appomattox board, the county enjoyed sound finances and low indebtedness, and it had the capacity to issue new bonds, Carter says. What the books did not say, she adds, is that important public buildings suffered from a major maintenance backlog. The balance sheet did not necessarily reflect the true condition of the county’s assets – a level of detail that investment bankers from Richmond might not be familiar with.

A third challenge is citizen indifference. Only one issue is guaranteed to pack the supervisor chambers – a proposed tax increase. Many are the meetings where no more than one or two citizens show up. Supervisors get punished for taking a highly visible action like raising the property tax, but no one notices if they take budgetary short-cuts that undermine the county’s fiscal health.

Most people don’t pay attention to the nitty gritty issues of local government until things fall apart, Carter says. “Then they want to know, what went wrong?”

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12 responses to “Harder Than It Looks”

  1. Hill City Jim Avatar
    Hill City Jim

    ” It can take years for a novice to master the nuances of everything from school funding,…”
    Here’s a hint. Nobody understands school funding. All they understand is mo’ money!

  2. LarrytheG Avatar

    excellent article and interview!!!

    what I would add is that Spotsylvania uses Davenport also and I’m not sure they have a conflict … would like to know more but in numerous discussions with the Spotsy BOS -Davenport has hammered home the various metrics used by rating agencies and the importance of maintaining them – a major one of course the percent of debt relative to revenues and capability to repay debt.

    Last week Spotsylvania was notified by one of the rating agencies – Fitch that their rating has now been elevated to AAA.

    There is no question that they got there by heeding the advice of Davenport because the BOS -like the one in Appomattox consists of ordinary citizens, most with full time jobs and reliant on the Budget Staff for information.

    so let me give an example. The county has a water/sewer authority – which sells bonds and has debt – but it’s totally separate from the county bonds. The water/sewer bonds are paid for with hook-up fees and monthly use charges – to those who are connected and not with county taxpayer dollars. Invariably the new guys during their first budget discussions trip over this and have to be told “how it works”.

    The county also has a fair amount of debt because it is in growth corridor and schools and fire/rescue stations go up on a regular basis… and dealing with that debt is a struggle every year but as I said -they maintained the fiscal discipline that Davenport counseled and as a result – they have saved – literally millions of dollars in interest by qualifying for very low rates. They have even been able to re-finance existing debt and lower the debt owed.

    So my view is – if you don’t trust Davenport – find a bond counsel you will trust – and/or seek second opinions – but don’t use that doubt as an excuse to not follow advice… find experts whose advice you will follow. Localities go wrong when they don’t have advisors or don’t follow their advisors advice.

    Davenport gives slide presentations to the BOS which is broadcast to citizens and I find their presentations to be – sobering… it generally is dry and no doubt as to what they are advising.
    I’d be concerned if the county was ignoring their advice and did not find other advisors whose advice they would follow.

  3. Sara E. Carter Avatar
    Sara E. Carter

    To clarify, Davenport has done a great job for Appomattox County and I have found them to be completely trustworthy and helpful. They provide excellent data regarding the county’s indebtedness and financial position, and the impacts of borrowing- on the bottom line and on the county’s financial health. We just refinanced debt, and used Davenport, and I have been very happy with their services. They stuck with us for over two years of discussion until we could get to the package that made sense for us. That being said, their paycheck happens once the county borrows/refis, not before. And the decisions to add debt, refinance, double down on paying off debt, renovate, build new…..and so on…. Those decisions are political and policy based, and your financial advisors are not responsible for those, and really can’t advise the county.

    1. LarrytheG Avatar

      Hey Sara! THANKS for weighing in directly!

      Spotsylvania pays Davenport for their services… you don’t?

      If you don’t – then I agree with you – there is a conflict.

      re: ” Those decisions are political and policy based, and your financial advisors are not responsible for those, and really can’t advise the county.”

      well they give Spotsy a top end number for debt in terms of how higher changes their assessment and Spotsy actually does do policy based on the Davenport metrics.

      we had a proposal for a baseball stadium – and phrases like net present value were flying about!

      Maybe I misunderstood.

  4. Kudos on an excellent article on what local elected officials face at all levels. You mentioned briefly the issue of time. Elected officials are appointed to all sorts of local and regional bodies and are expected to be up on those issues also.
    Both VML and VACo conduct ‘boot camps’ for newly elected officials on a regular basis. Most attendees leave with a look of shock on their faces at the end of the one or two day session. They learn about the many mandates with which they have to comply and for which there is little or no federal or state money to help. [If you really want to see a good example of an unfunded mandate, Jim, crack open the Comprehensive Services Act.] They learn about a whole host of other things and, unfortunately, because of time, the training can only scratch the surface.
    One session of which I was familiar was a 3-4 hour training module on budgeting, consisting of the theory followed by a practical application. It was taught by seasoned local government managers and was an eye-opener, to say the least. All those who participated in that session gave it very high marks. And unless their local manager takes the time to give them more practical training [and I suspect that they all do], that is about all newly elected officials learn about the most important part of their job. Bosun

  5. LarrytheG Avatar

    talking about infrastructure -dealing with transportation projects is a steep challenge also.

    these ordinary citizens come on the board and they don’t understand how transportation planning nor funding works and are , in my view, not competent if left to their own devices.

    VDOT is getting serious about access management – is convinced that congestion and safety are paramount issues with medians and cross-overs in busy business districts – and the BOS has one view – they want access to businesses – no matter what … if LOS goes to F or accidents triple… it boggles the mind.

    They think that I-95 is there for their use and convenience – they are SHOCKED when FHWA requires them to do an IJR and tells them what surface street upgrades are necessary to get the access.

    On an on … they don’t know how water/sewer works… they don’t understand that some ordinances are REQUIRED to adhere to State and Federal laws… they argue … they vote against and the County staff have to explain to them…they can’t do that or if they do if will have repercussions…

    Over and over -it comes across as ordinary citizens who wanted to be elected but they quickly realize they don’t really know how stuff really works and sometimes it’s just plain comical to watch the “deliberations”…

    Last week – they passed a resolution of “defiance” against impending EPA rules for nitrogen in sewage…

    1. TooManyTaxes Avatar

      Fairfax County has seemingly gotten with the VDOT program on limiting curb cuts. It’s been years since I’ve heard a county official push back on curb cuts. Other issues – yes.

  6. LarrytheG Avatar

    re: ” [If you really want to see a good example of an unfunded mandate, Jim, crack open the Comprehensive Services Act.]

    I think that’s your CUE Bosun – how about it?

    there’s a philosophy there – and it also extends to SOQs in the schools.

    There are more than a few counties in Va that would not fund SOQ staff and instruction if it were not for the state requiring it.

    They’d not do social services either… or a few other things..like road standards, or sewage discharges, and that’s where Bosun could lay it out for readers… I suspect…

  7. Larry, I had enough problems keeping track of all involved in land use, transportation and housing [e.g., spent too many meetings working with VDOT on access management regulations] and stayed away from human services area. In another words, I know enough about that area to be dangerous.
    I did, however, sit in on a number of training session for elected officials on CSA and what I heard was amazing. Basically it is a service arranged between the state and parents and perhaps the courts, but local government pays the bills with little input.
    Services to those with mental health, mental retardation and substance abuse concerns are desperately needed [attend a GA budget public hearing before an upcoming session], but they are expensive.

    1. LarrytheG Avatar

      The time stamp for your response – another “morning” person!

      the “arranged service” is , in my mind, something that many localities would not address at all much less put money towards it , without the State fostering it.

      So, given the discussions we often see here in BR about the role and purpose and legitimacy of “government” – I find this a worthy topic that many, if no most, are little aware of – and it goes to the heart of whether “govt” – should care for those in society that are incapable of caring or benefiting themselves without help.

      the issue of expense and whether the govt renders that help in a cost-efficient way – often masks the core issue of whether govt SHOULD be doing that role – at all or not – and if so, at what level.

      So what Virginia does is it essentially requires the localities to perform that role whether they agree they should or not – and the bigger picture is – if the State did not do this -what would much of Virginia look like in all those places that local govt chose to not do that role?

      People get bound up over the Dillon Rule -but that’s in essence a good part of it –

      If VDOT did not impose uniform standards statewide – would Virginia look more like a patchwork of widely different balkanized enclaves each with it’s own chosen and not chosen standards and levels of services – from VDOT to public schools to basic ordinances and laws,

      Social Services in one place would be different than in others and in still others would not be present at all.

      So – take this back to locality governance – Ms. Carter and her fellow elected BOS and their collective “understanding” of how govt at the local level actually “works” – especially the money part – taxes and services, infrastructure – and fiscal integrity in providing.

      Petersburg fails – Henrico excels and Appomattox of which I admit ignorance, would not surprise me to be in between.

      Finally – what would ANY of this look like if Virginia did not REQUIRE CAFR and the audit standards enforced by the Auditor of Public Accounts?

      I strongly suspect we’d be back to a Boss Hogg world where whoever runs the place gets to set the rules and the rules don’t really empower the citizenry to do much more than live there and pay taxes …. and hope they don’t run afoul of Mr. Hoggs deputies.

      Bosun and Ms. Carter – have much to offer in helping to enlighten folks and while I realize they do have their own busy lives – I thank them both for their contributions and beg them to consider more regular ones to help fill in the “theory” and “belief” blanks that often predominate simply because we don’t have real practical knowledge to base opinion on so we end up with these concepts that “govt is fundamentally flawed” – like that makes any kind of real sense in any meaningful way – but that’s the pain at times.

  8. TooManyTaxes Avatar

    Sovereignty lies with the state and not with local governments. Even in states where cities and counties have “home rule” status, they only have as much power as the state gives them.

    There is plenty of room to give local governments flexibility to solve local problems based on what seems to be the best tool, so long as the use of the tool is authorized by state law. But I don’t think we want to live in a state where one’s rights and duties vary by their postal address. Nor is it appropriate for some local governments to refuse to apply state laws that are supposed to applied across the state.

    There are some foolish state laws in Virginia as they affect local government. For example, cities and towns have different taxing authority than do counties. And some counties receive different taxing authority than other counties. The so-called “Kings Dominion Law” has exceptions that allow some 70 school divisions to start classes before Labor Day, while the rest generally cannot. But none of this changes the essential doctrine that states and not their subdivisions are sovereign. Change the dumb laws, but let’s also work within our system of government.

  9. LarrytheG Avatar

    Some folks think that each locality’s differences are like different laboratories for governance much like folks think the distinctions for 50 different states are better than one monolithic governance and actually more than a few folks these days are actually not happen with the Feds imposing their rules and regulations so ..

    there is always this ying and yang… and I suspect always will be

    and we are also split on the idea of having professional full time elected and citizen legislatures…

    hate and discontent abound on the idea of professional politicians but at the local level – ordinary citizens are wholly unprepared for how government – even at the local level operates… and it’s a steep learning curve that many of them struggle with even after attending VACOs boot camp or the Sorensen Institute for Political Leadership.

    Really basic things like what ordinances are and how they work , how they have to be worded … etc… are like a foreign language that has to be learned.

    Our local BOS got into a disagreement with VACO over eminent domain which the citizen BOS opposed and VACO wanted .

    The local BOS found itself – unwilling to use eminent domain on a highway widening and VDOT had to step in.. ditto for a VRE parking lot …the local BOS finds itself at loggerheads with both Federal and State laws and regulations. They threatened to vote down state-required storm water and Chesapeake Bay regs.. they voted a resolution to oppose EPA TMDL pollutant limits.

    so … the State and the Feds wants standards.. consistency – policy – and the localities not so much. I’m pretty sure that if the state did not require SOQ and NCLB standards that many localities would just do their own thing.

    They’d do that with roads if it were not for VDOT.

    My locality would sell the National Park Battlefields if they had their way!!! we ha no bike trails nor will we as long as they are elected. Sidewalks are evil extra costs put on developers.. and a couple of them would quit the regional library and transit system.

    They don’t understand why water/sewer hookups cost so much and would try to find “efficiencies” to lower the cost – no doubt leading to lapses in drinking water standards and sewage discharges… in the process.

    and we already know how some local governance does finances though I have to admit so far in our case – a good job… AAA good.

    Oh – and they aspire higher office in Richmond!!!

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