After group finds more problems, Hopewell allocates more money to pay for fixing them

HOPEWELL – It is going to take longer and cost more than expected to get Hopewell’s financial infrastructure back on track.

Why? Because according to a municipal advisory firm brought in to fix the problems, things were worse than it originally anticipated.

The Robert Bobb Group, hired by the city last August to help Hopewell get caught up on state-required audits and develop remedies for the city’s somewhat-feeble accounting practices, has added three more objectives to its plan of attack. Among those recommendations were completely revamping the city finance department from the top down, booting the temporary accounting firm that Hopewell’s previous administration had hired to assist with the books and streamline the city’s MUNIS system.

The addition of the new objectives added more than $864,000 to the $988,000 Hopewell originally agreed to when it signed the contract with RBG last summer. During its meeting last week, City Council unanimously voted for the extra spending.

The added money will be taken from the city's unassigned fund balance.

As RBG dug further into its analysis of the Hopewell money system, it found more problems, according to Heather Ness, the RBG executive overseeing the Hopewell work. Ness told council the group had discovered breakdowns in budget forecasting, failures in wastewater treatment billing and no coordination among city departments in controlling spending.

Because the city had not submitted the required annual audits of its checkbook to the state since 2015, it lacked the ability to issue bonds to pay for needed capital improvements such as a new fire station.

Ness said the recent analysis also uncovered “significant unbudgeted expenditures which have been fully absorbed by the city” that in time could drain the city’s money reserves and cause Hopewell’s overall fiscal health to “significantly deteriorate.”

Since those discoveries were made, Hopewell has taken several steps to turn things around.

For example, Hopewell finance director Michael Terry, who had been on the job since 2017, was replaced on an interim basis by an RBG employee whose sole goal is to reorganize the department according to RBG’s recommended strategies. That way, when the group’s work is completed and the city is ready to hire a permanent replacement for Terry, he or she could continue the practices put in place.

Ness told council that the interim finance director is leading the department “effectively.”

RBG also has reconciled all the checks the city wrote between 2020 and this year in the MUNIS system and has negotiated extended training and support for city workers using the system. In the past, employees had complained that the city expected them to jump into working the system without adequate training, and that led to many of them reconciling through their own shortcuts rather than a uniform method.

In the meantime, an accounting firm working with RBG has made significant inroads into getting the state audits caught up, and a goal to have them all updated and ready for state approval by 2024 is well within reach.

RBG has worked with cities across the country on getting their financial houses in order. It probably is best known around here for the work it did in 2016 to pull Petersburg from the brink of bankruptcy after years of fiscal turmoil.

When Hopewell hired RBG, many had expressed concerns that the city was heading down the same road as Petersburg seven years ago. An analysis of the city’s records done by the Youngkin administration revealed that Hopewell was not as dire as Petersburg in that it could still meet payroll and pay its bills. However, if nothing were to be done to turn things around, Hopewell’s fiscal outlook would only get bleaker.

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: Hopewell adds more money to contract rehabbing its spending system