On March 17, just two weeks after becoming Richmond City Council’s surprise pick to fill Mayor Tom Butt’s vacated council seat, Vinay Pimple (pictured), a political outsider welcomed to City Hall for his calm pragmatism, took issue with a low-priority agenda item regarding a memorial plaque at Nevin Community Center.
City staff had pegged the cost of the plaque, which was to be placed on an existing park bench, at $4,000, including installation and upkeep. In a city with a $144 million budget, a debate of any length over $4,000 might not seem like a valuable way to spend council’s time. Surely there are bigger fish to fry. But after Pimple expressed doubt about the plaque’s cost, a lengthy debate indeed followed.
Pimple may be a fresh face in Richmond’s political scene, but he has not been shy about pointing out challenging fiscal decisions of any size, and in fact his dogged insistence on fiscal transparency since his council appointment has even grated upon council colleagues. Some members believe most budget decisions, which are indeed complex, should be left to the financial experts on city staff.
But recent news about Richmond’s vulnerable financial situation reveals that all along, Pimple has been frying the city’s biggest fish. Back in June, while council grappled over rent control and a space weapons ban prior to passing the 2015-16 budget, Pimple was one of the only members who focused less on the merits of such policies than their cost to the city’s general fund.
He had reason for concern. Bond-rating agency Moody’s noticed what Pimple was growing to understand in his new role on council: the city was struggling to balance its budget and it wasn’t clear that enough was being done to rectify it. While cuts were made in the city’s spending, the city still had to use all proceeds from Measure U, a tax promised for sustained road repair, toward plugging up a $9 million deficit.
Richmond’s fiscal troubles prompted Moody’s to downgrade the city’s issuer rating in both May and August. The downgrade was costly, resulting in a $30 million bond termination fee for the cash-strapped city. Without swift action to respond to the downgrade, the city could face another downgrade, this time by Standard & Poor’s, which could cost the city another crippling $25 million bond termination fee.
In order to prevent further fiscal pain, the city plans to issue additional bonds to refund some of the related pension bonds and also to pay the termination fee. Public finance attorney John Knox warned the financial markets’ concerns stemmed from the city over-spending revenues on an annual basis and having “an extremely thin margin of error in its budget.”
One would think such terrible financial news would have dominated council’s attention. And yet, Pimple’s proposal to launch into more discussion on the topic faced resistance at the latest City Council meeting.
During the meeting, Pimple suggested that staff present financial information to council on a more regular basis, rather than only during budget season. More immediately, he pushed to ensure that city staff present how the city can prevent a future credit rating downgrade by S&P.
“That is part of what I want to change — to have different financial items put on study session every month so that everyone in council is more aware of the city finances,” Pimple told the Richmond Standard. “What tends to happen is every year, we work on financial items only when we need to. Whatever the city manager puts forward is OK’d…without an understanding of what the city’s finances are. Personally I don’t think that’s a good way to go.”
The request, says Pimple, is not an affront on city staff’s ability to handle finances, but rather an effort to empower council members – as well as the public – to make informed choices during meetings.
Some councilmembers either don’t believe Moody’s fairly judged Richmond, as Mayor Tom Butt has suggested, or would prefer to kick the financial can down the road, as Pimple believes.
Pimple resisted suggestions that the city wait until January to revisit the city’s financial future or until City Manager Bill Lindsay presents results from a 5-year financial forecast.
“My issue is, did the councilmembers know in April that [Richmond was] four months away from junk bond status?” Pimple said.
It is true, Pimple says, that a councilmember may not have the financial expertise nor the time to thoroughly understand every last expense – such as the reason a simple plaque on a park bench would cost $4,000. And Pimple admits the city is short-staffed due to cuts, although he’s unconvinced that all efforts to identify savings and efficiencies have been exhausted.
In the least, Pimple argues, a better financial understanding could fundamentally change the focus of council meetings. Perhaps proposals such as rent control, a policy debate that has been primarily about renters protections, could equally be about whether the city can afford such a policy change, he says.
Expertise from the Richmond public, which includes a number of smart money managers, can be assets for the city’s financial future.
“When the public is more aware of the financial situation, they can understand when we take those measures,” Pimple said. “If you don’t tell them anything at all [until it’s time to approve a budget], people think everything is fine.”
Pimple’s nagging financial requests on council, however, are catching on with fellow members. Councilmember Eduardo Martinez was among those defending Pimple’s call for financial transparency.
“I do believe that for us to be the quality council members that we strive to be, the more information we have, the better our decisions will be,” Martinez said. “I also believe that having these sorts of conversations in public not only informs us…but it helps the public understand how the city runs and gives them a better appreciation of the immensity of the job that we have.”
And who knows? Council members may be able to discover – or at least enforce – efficiencies in the budget. After discussing the cost of the park bench plaque, council learned it could be done for under $1,000, achieving a 75-percent savings.
That result, however, still failed to satisfy Pimple, who had heard the job could be done for as low as $60.
“We need to learn to live within our means,” he says.