The city of Richmond is “City B,” the unnamed locality, which, along with Petersburg, Bristol and two unnamed counties, was noted by the Auditor of Public Accounts as in severe fiscal stress, reports the Richmond Free Press. While State Auditor Martha S. Mavredes has not identified Richmond publicly, the city’s name is included in a report that has circulated widely within government circles.
That classification, which was based on 10 financial ratios taken from localities’ Comprehensive Annual Financial Reports (CAFR), might come as a surprise to investors in Richmond’s AA rated bonds. But the city’s score under Mavredes’ methodology has plummeted in the past two years from 50 in fiscal 2014 to 13.7 in 2016. The weekly did not provide the data behind the scores.
The low rating is all the more astounding given the fact that the city is not an aging mill town like Petersburg and Bristol, but has a diversified economy with strong government and finance sectors, and has enjoyed extensive real estate re-development, a growing population and an expanding tax base. The main warning sign has been the inability of city administrators to consistently meet deadlines for publishing their CAFR.