Bill cementing process for state aid to fiscally strapped localities heads to Senate floor

RICHMOND – A bill codifying the process for the state to step in and help localities relieve fiscal stress is now heading to the Senate floor after passing its last committee hurdle Wednesday morning.

On a 9-5 vote with one abstention, the Senate Finance & Appropriations Committee advanced Senate Bill 645, sponsored by Sen. Lashrecse Aird, D-Petersburg. The legislation has drawn protests from several factions – including most city councilors in Hopewell whose pushback against state help prompted the bill’s introduction – over the extent of how far Virginia can intervene in a city county ledger.

Throughout most of the bill’s deliberations, first in the Senate Local Government Committee and again in Finance & Appropriations, Aird has sought to diffuse those concerns. She reiterated Wednesday morning that the bill does not give the governor or anyone in state administration carte-blanche to take over the locality.

As originally introduced, Senate Bill 645 would have given the governor the power to appoint an emergency fiscal-distress manager to take the reins of any locality that has been either unable or unwilling to submit required annual audits of its money management to the state auditor of public accounts. It was amended in the Local Government Committee to transfer that power from the governor to the nonpartisan Virginia Commission on Local Government. It also would give that manager the right to temporarily assume duties of the local treasurer, an amendment that drew the ire of the Virginia Treasurers’ Association.

“That is not what this legislation does,” Aird told committee members Wednesday morning.

A similar process for government assistance exists in Virginia’s budget language. Aird said her measure fine-tunes that process and transfers it into the state code.

The process kicks into place once a locality has been notified several times by the state auditor about the non-filing of the required audits at least six times, Aird said. Hopewell had not submitted such audits since 2015, but the city has hired the Robert Bobb Group to get Hopewell up to speed.

“As a commonwealth, we cannot allow any of our localities to file bankruptcy or to fall into a state where they’re not able to function financially,” Aird said.

Hopewell on legislators' minds

Aird has been careful not to single out Hopewell as the catalyst for the legislation. However, well-publicized accounts of the city’s battle last year with state Finance Secretary Stephen Cummings and Cummings’ comment about Hopewell being a “five-alarm fire” have been recognized by many legislators, including some Finance committee members.

“For years, they filed no reports,” Sen. Jeremy McPike, D-Prince William County, said of Hopewell. “They kind of shrugged it off.”

Some on Hopewell's council fault the city's previous administration with not pushing hard enough to get the audits done. One of those administrators they pointed to was March Altman, who left Hopewell in 2022 to become city manager in Petersburg.

Since the dust-up with Cummings last year, Hopewell has hired the Robert Bobb Group to assist with reorganzing the city's money-management system. RBG, which helped Petersburg avoid total financial ruin eight years ago, is reporting significant process in not only getting the Hopewell audits caught up but also implementing a management process it said had been lacking in Hopewell for several years.

McPike called Aird's bill “a much-needed tool” for helping localities “who do not respond to the information we requested.”

'Overreach' still a concern

Not everyone on the panel was convinced.

Sen. Mark Obenshain, R-Rockingham County, said he wanted “to support this bill,” but his office had been flooded with concerns from constitutional officers specifically about assuming the treasurer’s role.

“This does not displace the treasurer,” Aird told Obenshain.

Support and opposition to the legislation was bipartisan.

Obenshain and fellow Republicans Ryan McDougle of Hanover County and Todd Pillion of Abingdon were joined by Democrats Louise Lucas of Portsmouth and Creigh Deeds of Charlottesville in voting against it. Republican Sen. Bryce Reeves of Orange County joined Democrats in voting to advance it.

Sen. Richard Stuart, R-Westmoreland County, abstained.

Progress on companion legislation in the House of Delegates has stalled while the House Counties, Cities & Towns Committee waits to deliberate it. A CCT subcommittee has recommended tabling the bill from Del. Carrie Coyner, R-Chesterfield County, and that recommendation is expected to be taken up when the full committee meets Friday morning.

Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.

This article originally appeared on The Progress-Index: Senate panel advances fiscal-distressed locality assistance bill