RICHMOND (WRIC)—Last month, an ABC 8 News investigation exposed that City of Richmond employees used nearly $30,000 in public funds for their lavish holiday parties. Anchor/Investigative Reporter Kerri O'Brien did some digging, and it turns out these celebrations are going to cost you, the taxpayer, even more.
After combing through receipts, O'Brien noticed several problems with the city's bills. The city's Department of Social Services, Public Utilities and the mayor's staff were all treated to some holiday cheer on the taxpayers' dime, including a party in the Omni Richmond Hotel's James River Room, elegant meals complete with cheese plates and jumbo shrimp, and a casino night. O'Brien discovered nine out of 12 receipts contained mistakes, some with the wrong tax rate. At least four receipts show the City of Richmond paid nothing in state sales tax for the catering services, nor did it pay its own city meals tax.
Government watchdog Rick Tatnall says the state is losing out on money it is due—money the Virginia Department of Taxation says is used for K-12 education and transportation.
"This is in everybody's best interest to get this right," Tatnall said. "There are people that work for the city that don't necessarily know the rules, but there are people above them that do know the rules, and those people approved every one of these invoices."
Some of the vendors told ABC 8 News they assumed the city was tax exempt, but Groovin Gourmets, which catered a holiday party for Richmond's Minority Business Association, says its notes show that the city employee who ordered the food told the company the city is tax exempt.
Richmond City Council President Charles Samuels says the city needs to hold itself to the same standards as everyone else.
"We're talking about the city attempting to waive paying a state tax," he said.
Samuels and Tatnall worry that if O'Brien found so many mistakes on just this one set of receipts, the problem could be more widespread. Samuels blames the errors on leadership, saying there has been too much turnover and confusion within the city's Finance Department.
"It's something without strong leadership at the top we're never going to be able to fix," Samuels said.
ABC 8 News pointed out the mistakes to the city's Finance Department, which said it will work harder to train its employees.
The mayor's press secretary wrote in an email, "The Finance Department is reconciling those accounts with respective vendors," meaning the cost of those holiday parties just went up.
O'Brien's calculations show the City of Richmond owes more than $450 in state sales tax and more than $200 for the city meals tax.
Samuels was shocked to learn about these holiday parties when ABC 8 News first exposed the spending earlier this year. Today, he says he's told the mayor and the city's chief administrative officer that while he believes employees' good work should be recognized, he cannot approve this kind of excessive spending for end-of-year celebrations.
"We have a budget, and the taxpayers are the ones who fund that budget," Samuels said. "We need to be good stewards of the taxpayer money, and I am not at all convinced that an $11,000 party is an appropriate use of taxpayer money for one department."
The $11,000 Samuels is referring to was the tab the troubled Department of Social Services spent on its fancy Omni and casino night party.
Next month, the City of Richmond is expected to release its budget; O'Brien will keep an eye on how officials are spending your money.
This investigation all started with a viewer tip. If you have a story for Anchor/Investigative Reporter Kerri O'Brien to look into, email her at KerriInvestigates@wric.com, like her on Facebook or follow her on Twitter (@Kerri8News).
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