Hopewell asks the General Assembly to reject fiscal-distress amendment carving out region

RICHMOND – Hopewell is pushing back against an amendment to proposed legislation that would limit the scope of so-called “fiscally distressed” localities affected by the bill to central Virginia.

In a letter to state lawmakers, a majority of Hopewell City Council said it was “unjust” that Senate Bill 645 be narrowed to cover only the cities and counties found in the state’s Planning District 19 – also known as the Crater Planning District. That district extends from the Tri-Cities southward to the state line.

They felt Hopewell was being targeted by the amendment because the legislation itself was birthed from a disagreement last year between City Council and the Youngkin administration over the extent of the state intervening into the financial affairs of a locality.

SB 645, sponsored by Sen. Lashrecse Aird, D-Petersburg, is now heading to the full House of Delegates for approval. It was voted out 18-1 Wednesday morning by the House Counties, Cities & Towns Committee.

The legislation codifies a budget process that would allow the state Auditor of Public Accounts to declare any locality that has not had a clean audit for six years to be deemed as “fiscally distressed.” Those localities would either have been unable or unwilling to submit those required reports.

Hopewell had not submitted an audit since 2019 and had not had a clean audit since 2015. City Council has laid the blame for that at the feet of previous city managers – including March Altman, who left Hopewell two years ago to be Petersburg’s city manager – for not following through on the process and keeping local lawmakers in the dark about that.

The letter, a draft of which was given to The Progress-Index, pointed out that according to Virginia data from 2023, there are 21 cities and counties considered among the higher risks for fiscal distress. At number 11, Hopewell is in the middle of that list – still a risk factor but not as high as Emporia (#1) and Petersburg (#3). Both of those cities are part of the Crater District with Hopewell.

The letter also noted there are 47 other Virginia localities in the mid- and lower levels of fiscal distress. With all those localities, the letter said, there should not be special emphasis placed on Hopewell or any other Crater District city.

“This bill strictly narrows its focus to the City of Hopewell,” the letter read. “This is unfair, unjust, and severely overreaching.”

The letter made several requests, the top one being for Aird to pull the bill and the issue be studied for a year. If that were not possible, then the letter wants the Crater District amendment to be taken out on the House floor to remove the language specifying the Crater District.

“[That] benefits all fiscally stressed localities,” the letter stated.

The letter closes with, "If this bill is not good for all localities in the commonwealth of Virginia, it's not good for the Crater Planning District."

The timing of the request could be a factor. The General Assembly's 2024 regular legislative session ends March 9, and lawmakers are scurrying to clear the decks of any legislation not related to the biennium budget package that will dominate the session's final week.

During deliberations, Aird and Del. Carrie Coyner, R-Chesterfield County, made it a point not to specifically say Hopewell was the catalyst. Coyner’s version of the bill that mirrored the Senate measure died on the House floor in what many said was a political move by Democrats controlling the chamber to curtail GOP-sponsored legislation. However, others who have testified at committee hearings – the Hopewell-Prince George Chamber of Commerce and Hopewell’s legislative liaison – have pointed out the city’s tie.

The measure is not supported by a majority of Hopewell City Council members. Herbert Bragg, Hopewell’s liaison, read a letter at committee hearings from five of them urging the legislature to defeat the bill. That prompted the other two councilors, Mayor Johnny Partin Jr. and Ward 1’s Rita Joyner, to pen their own letter calling for the bill to pass.

Not just Hopewell criticizing the bill

The bill making its way through the House now would allow the nonpartisan Virginia Commission on Local Government to appoint a “temporary emergency manager” to take the reins of the locality’s finances and develop a plan to get the ledgers back in order. Part of the rein-taking includes assuming some duties of the locality’s treasurer, technically a local employee but also a constitutional officer elected by the locality’s voters.

During deliberations Tuesday morning before a House Counties, Cities & Towns subcommittee, the lobbyist for the Virginia Treasurers Association and several treasurers pleaded for that language to be removed. They said it would allow a government employee to essentially get rid of a directly elected official.

Chesterfield treasurer Rebecca Longnaker said the problems in Hopewell were not the fault of current Hopewell treasurer Shannon Foskey. Foskey inherited the issues from her predecessor, to whom Longnaker claimed her office offered to help with the financial records, and she “did not accept our help.”

“We are here as treasurers to help each other,” Longnaker said.

Longnaker’s testimony falls in line with what many on City Council claim was the root of Hopewell’s current problem: lack of sharing knowledge with others outside of the Municipal Building – including council – about the money shortcomings.

Because Hopewell had not submitted a timely audit since 2015, the city’s bond rating has almost flatlined. Because of that, the city has not been able to float bonds for much-needed capital improvements such as a new fire station.

‘Important’ to consider end result

Since its public showdown with the Youngkin administration over intervention, Hopewell has brought in the Robert Bobb Group to help frame a universal financial system and develop a project-management process for that universal system. RBG, which was known in the area for pulling Petersburg from the brink of financial collapse in 2016, has aided city government in getting the audits caught up and on schedule to be completely up to par by the end of this year.

The price tag so far for RBG is just shy of $1.8 million.

In efforts to show unity in pulling Hopewell out of the financial hole, councilors have taken deliberate steps to show that RBG’s recommendations are closely vetted. That was on display at Tuesday night’s meeting in discussions over RBG’s recommendations to shift accounting work from Foskey’s office to a newly upgraded Hopewell Finance & Treasury Department.

According to that plan, the account would physically remain in the treasurer’s office but report to Hopewell’s finance director and act as a liaison between the finance office and the treasurer. Among the duties that accountant would be responsible for are bank reconciliations and maintaining the treasurer’s report for the annual Hopewell audit.

Council had planned to accept that recommendation at the meeting, but some on the dais pushed for it to be delayed so that Foskey could review the agreement and offer her suggestions. While the delay was ultimately accepted, Vice Mayor Jasmine Gore wanted to make a public declaration that the delay does not mean there is any resistance to the proposal.

“In terms of reporting purposes, it’s important to note that all seven of us agree on the [agreement], we agree on the intent and we agree with the purpose,” Gore said. “Where we may see some disagreement tonight [with] a time frame in which to just go ahead and pass this because of some questions/concerns raised in closed session, it still does not negate the fact that everyone says to pass it.

“So I just want to make sure it’s important that when people repeat what they heard tonight or there is a story written, it’s very clear that all seven of us support and want this passed,” Gore added.

The issue is expected to be taken up at council’s March 12 meeting.

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 wants fiscal-distress bill to cover everyone, not just them