Critics dispute mayor's claim she rescued Suffolk's finances

SUFFOLK

On the campaign trail, Mayor Linda Johnson and her supporters say she has led the city back from the brink of financial disaster in two years.

They have even compared Suffolk's situation in 2006, when Johnson was appointed mayor by the council, to that of Chowan County, N.C.

"We were in trouble, folks, very plain and simple," Johnson told a crowd last week.

Other people active in Suffolk politics say Johnson's campaign is exaggerating, if not twisting, the truth.

"That's just dirty politics for them to try to do that," said former Mayor Bobby Ralph.

Ralph lost his council seat in 2006 to Charles Parr, a Johnson supporter. He's supporting mayoral candidate Mike Debranski.

Thomas Woodward, a councilman from 1998 to 2002, called Johnson's claims "just flat wrong."

"If you tell something enough, eventually it has the ring of truth," he said. "It simply is not so."

"Overstated," said Andy Damiani, another mayoral candidate. "She's bled that thing to death."

The contention centers in part on a financial report that followed a power shift on the council in 2006. Voters had ousted Ralph and another supporter of then-City Manager Steve Herbert. The new council, now led by Johnson, fired Herbert and commissioned an outside firm, Davenport & Co., to analyze the city's finances.

The report concluded that the city was violating many of its own policies. For instance, the undesignated general fund balance - or rainy day fund - had fallen in fiscal year 2005 to just 5.2 percent of expenditures. City policy called it to stay above 10 percent.

At a campaign gathering in August, former City Manager Jim Vacalis credited Johnson's leadership in the summer of 2006 with drawing attention to some serious problems. Vacalis, a longtime city employee, replaced Herbert as city manager until he retired early this year.

"Linda and I talked, and we knew something was dead wrong," he said.

Others have questioned the value of the report from Davenport, which has since become the city's financial adviser. Christine Ledford, the city's finance director at the time, contended Davenport used data that was more than a year old and, in at least one instance, inaccurate.

Woodward, who sued the city in 2007 to get it to release Ledford's response to the report, said Johnson has tried to capitalize on a distorted picture of the city's finances.

"What you do is you set it up and you ride in on a white horse to say, 'I'm going to rescue you,' " he said.

Last week, Johnson told the audience at a candidate forum that the city had only $500,000 in reserves when she became mayor. Now that figure is closer to $28 million, she said.

In an interview in July, she referenced the news reports that had begun to surface in Chowan County, where it was discovered that its cash reserves had been nearly depleted through unauthorized expenditures.

"Two years ago our unappropriated fund balance was lower than theirs," Johnson said. "When I became mayor it was at half a million dollars."

In fact, the city had about $11 million in unrestricted cash and investments in the fiscal year ending June 30, 2006, according to its own financial report. Johnson was appointed mayor in July 2006.

But the financial report on that fiscal year wouldn't be available for months. Johnson said she had to act on the data available when she became mayor.

The $500,000 figure reflects a number highlighted in the Davenport report, which came out in fall 2006. It said the city had $526,000 in unrestricted cash at the end of the fiscal year ending June 30, 2005.

"The fact that we ended up with $11 million at the end of '06 - we really didn't know where we were going to end up," said Treasurer Ronald Williams, a Johnson supporter.

Ralph said the council knew the funds were coming back and were fully aware of how and when city money was spent, unlike the board of commissioners in Chowan County. The situation in 2006 was no cause for alarm, he said.

"Everybody knew the fund balance was going to build back up," he said.

Johnson, who is running against six challengers to be Suffolk's first elected mayor, said that wasn't a sure thing.

"She has set the bar high. She has insisted on very tight controls and goals that would lead us toward a Triple-A bond rating," Williams said. "It's a much more fiscally well-managed organization than we were two years ago."

Dave Forster, (757) 222-5563, dave.forster@pilotonline.com