by James A. Bacon
Here’s what happens when you run a city government like Petersburg into the ground: The regional waste management authority is threatening to suspend its trash removal and recycling services unless the city commits to a plan to repay the $632,000 it owes.
City residents and businesses have been paying their monthly fees to the city, but the city has fallen way behind in its remittances to the Central Virginia Waste Management Authority (CVWMA], which in turn contracts with a local vendor, Petersburg-based Container First Services.
“We have been paying that vendor and without receiving compensation from Petersburg, we won’t be able to sustain [the service] too much longer,” CVWMA Executive Director Kim Hynes, told the Richmond Times-Dispatch.
The unpaid bills are not trivial. CVWMA, which provides waste management services to 13 localities in Central Virginia, generated $13.4 million in operating revenues in Fiscal 2015, according to its 2015 comprehensive financial annual report. Petersburg’s unpaid bills far outweighs the $48,000 operating surplus the authority generated that year and the $501,000 cash it reported on its balance sheet.
Years of fiscal mismanagement came to a head this summer. A recent state audit of Petersburg’s finances revealed that the city is facing a $12 million budget gap in the current fiscal year while also dealing with $19 million in unpaid bills.
Bacon’s bottom line: The cost of Petersburg’s fiscal ineptitude is not limited to Petersburg. The inability to pay $632,000 in back bills puts the waste authority in an untenable situation. Either it stops providing garbage and recycle pickup for the city, which creates a potential health hazard for Petersburg citizens who have dutifully paid their bills, or the authority puts its own finances in jeopardy. Petersburg’s inability to pay its bills could potentially force the other jurisdictions of the Richmond region to step in to support the authority financially.
The moral of the story: When local governments are tied together through various regional compacts, a financial meltdown of one locality can shock waves to its neighbors.There are currently no comments highlighted.