Charles City financial situation updated, but citizens press forward with concerns

Ashamed. Disappointment. Embarrassed.

Those were the words used by several members of the public to address the handling of finances by Charles City County over the last several months during Tuesday night’s Charles City Board of Supervisors meeting that lasted more than three hours long.

For the last seven months, citizens have questioned several financial transactions and decisions made by county leadership. In Aug. 2024, supervisors agreed to a Revenue Anticipation Note (RAN) of $5.2 million, a short-term revenue boost to cover expenses. Since that moment, citizens have worried about the county’s finances and what happened to funding.

More issues began to appear that worried constituents. Among them included the payout to former county administrator Michelle Johnson and her departure, a deal for the sale of land for the construction of a data center, and most recently concerns that leaders were not listening to citizens’ concerns. The worries reached a point where citizens signed petitions for a forensic audit, as well as the removal of District 3 supervisor Byron Adkins Sr., who currently serves as chairman.

On Tuesday night, David Rose of Davenport Finance, which serves as the county’s financial consultant, made a presentation recapping the need for the RAN, and his findings to this point.

“In FY2020-21, you had an unassigned or rainy day fund of $10 million,” Rose said as he began his presentation. “Your audits and the county status was very good.

“Last Spring, we received a notice that the county’s cash-on-hand was running lower than substantial,” he continued. “There was a concern that there would not be enough money to make payroll. That’s when we (Davenport Finance) made a recommendation to enter into a RAN obligation.”

The consultant continued, pointing to how the county’s fund balance declined by $3 million in FY2023, and the county cash declined by 48 percent. While the current fiscal year did not have to use $1.6 million in current fund balance money, there was still a need to see what exactly happened to county money.

“We need the 2024 audit to find out what really went on,” Rose continued. “Right now, the RAN of $5 million is to be paid by the end of the fiscal year.”

Concerns about the audit have loomed, as it was supposed to be submitted by the end of 2024 and available for review. According to the finance representative, he received information that it would be ready approximately 30 days from the meeting, giving an estimate date of May 1.

“It is important to get the audit if we expect to get another round of dollars,” Rose said, pointing to how the need of a second RAN may be necessary to pay off the loan of the first one. “I’m not saying banks won’t lend it to us upon a emergency basis, but it’s not very likely.”

The finance representative stressed the importance of collecting taxes from citizens. While he commented that there hasn’t been an audit since 2023, he believed that a need for a forensic audit was premature.

“I can’t explain how that happened, but I know a forensic audit is timely and expensive,” Rose added. “Right now, you’re moving in the wrong direction and using unassigned money to balance the budget. It’s not the best practice and it’s unsustainable. That is when you had to raise taxes to balance the budget.”

During the public comment period, several citizens approached the lectern with several of their issues, not just related to the RAN and the information they just received.

“What’s happening and why is the county leadership not being transparent?” commented Steve Hart. “Do we spend more than we can afford?

“Why would a county with a budget of $22 million need to take out a loan so large?” he continued. “If the board spends more than they can afford, then it’s us, the taxpayers, who have to pay for it. In other words, if they do not have a balance budget, our taxes go up.”

For Bill Hopke, he is afraid that the county will enter into financial turmoil.

“I’ve been criticized by people in the county about using the word bankruptcy, but here Davenport just used it without saying those words,” Hopke commented. “Read the RAN; it provides an extra taxation to citizens in order to pay it off. Citizens have criticized the board about it and now, it comes to bite you in the rear end.”

Former Charles City Commonwealth’s Attorney Rob Tyler, who has been vocal about the board’s actions, didn’t hold back on his thoughts about the RAN and alleged deals being made by county leadership.

“The county has been in a downward spiraled ever since you [District 3 chairman Byron Adkins Sr.] have taken office and now the wheels have come off the machine,” Tyler began in his monologue. “For seven months, we have had seen several bad deals made by the county.”

Among Tyler’s accusations of deals include the establishment of Market 5, which has yet to open due to setbacks, and the sale of property for the construction of a data center, which he accused county leadership of not going through the process of competitive bidding.

“Now, you want us to pay for your high-end lawyers to defend you [Adkins] from the petitions citizens filed to remove you from office,” Tyler continued. “You want us to pay for your defense to keep you on the board. That’s just ridiculous. You need to do the honorable thing and resign.”

Currently, two petitions are currently in Charles City Circuit Court that were filed by citizens. One petition calls for the removal of Adkins, who has hired lawyers to fight it. An item on the agenda called for county funds to be used for the chairman’s defense. That item was deferred to the April meeting. The other petition filed asked the judge to order a forensic audit. Currently, county attorneys have filed a motion to dismiss it. That motion is also pending in circuit court.

More citizens attempted to pry information from county leaders. Residents who live around a proposed area that may be rezoned or granted a conditional-use permit (CUP) for the construction of a data center asked county leaders how they’d feel if it was around their home. That discussion is scheduled to be heard by Charles City’s Planning Commission on Apr. 10.

County leaders once again did not comment or respond directly to inquiries made by citizens. Interim county administrator Sanford Wanner commented that an update on the ongoing search for a replacement as well as information regarding the results of the audit will be made available once the processes are complete.