A city once on the verge of economic collapse may be on the verge of making a dramatic comeback.
It wasn’t all that long ago that the city of Petersburg was at the edge of total disaster. The schools were already the lowest performing in the state, and then the school system was forced to make painful cuts. Police officers faced cutbacks, even though crime was on the rise. The city spent all its reserves, and then kept spending money it didn’t have in a kind of downward spiral.
Now, says Mayor Samuel Parham, the city is making a turnaround with a new cast of characters.
“New assessor, new city attorney, new city manager, new police chief, new fire chief, new public works director, new finance director," he explains. "So we basically scrapped the whole thing and brought in highly qualified people.”
Those people are now investing $2.6 million into the city’s fund balance this year, an indication that the city is no longer in the red.
Frank Shafroth at George Mason University says the potential for insolvency in Petersburg would have ended up causing widespread damage.
“The state understood something that if Petersburg went into bankruptcy it would reflect on the state and other cities and counties in the state," says Shafroth. "So their cost of issuing debt would go up, so everyone had an interest in trying to resolve this problem.”
Petersburg is not out of the woods yet, though. School officials wanted an additional $1 million, a request city leaders were not able to deliver this year.