For months, Virginia’s mounting financial problems have produced audits, investigations, contentious council meetings and increasingly pointed questions about how millions of taxpayer dollars were managed.

The fallout reached the upper ranks of city hall this week.

Finance Director Maegen Bothwell was fired from her post Tuesday morning, weeks after being placed on paid administrative leave.

It’s a significant shake up for Virginia as the city not only enters the budgeting season for 2027, but also remains under the microscope for its overall financial condition, which has become increasingly more complex in recent years.

Among the issues are a foresnic audit over the misappropriation of more than $3.7 million of earmarked sales tax revenue. Councilors rejected an effort that would have explored outsourcing its police and fire/EMS units earlier this year.

The city’s 2025 audit showed millions of dollars in declining fund positions and multiple accounts with negative cash or deficit balances, and Virginia is also saddled with more than $77 million in long-term debt obligations.

Bothwell’s departure comes amid this backdrop and just weeks after the city council squared off over who was responsible for oversight of city funds.

Councilors voted 5-2 last month to place her on paid leave with Mayor Larry Cuffe Jr. and Councilor Steve Johnson opposing. On Tuesday, the vote to terminate her from the position was 4-3. Councilor Justin Skalko was the change in vote.

He said in August that Bothwell was put in a difficult situation — a sentiment shared across most of the council — but public transparency concerns existed throughout the city ranks.

“You got put into a snake pit and the flood gates opened this year,” Skalko said. “It doesn’t just fall on you. It’s leadership. They’re concerned about leadership, and the leadership is far beyond you … we need change.”

Budget inconsistencies, said some council members, met with the sales tax issue and $3 million spent from an investment fund to pay the city’s bills in the first quarter as “consistent red flags,” according Councilor Liz Motley.

Motley proposed relieving Bothwell of duty immediately in August, but was informed public employees were subject to a hearing before termination from a position.

Still, the writing appeared to be on the wall for the finance director.

“Directives are not being followed,” said Councilor Julianne Paulsen. “In order to have transparency, we need the truth, and sometimes it feels like it’s difficult to get to that point.”

Bothwell started as the finance director about a year ago after Sherry Erickson retired. City Administrator Britt See-Benes handled the director duties during the in between period when Bothwell was hired from the department ranks.

Councilor Steve Johnson said a lot of problems preceded her tenure, including the ways things were coded in the department.

“Maegen had some knowledge how the system worked and made some significant changes that made us more transparent than ever before,” said Mayor Larry Cuffe Jr.

Virginia officials in coming weeks will set a preliminary tax levy number with a final rate approved by year’s end.

Paulsen lamented the city’s progress in budgeting for 2027. She said the city cannot pay its bills and should no longer take out bonds, calling it a “dire” situation.

“We can no longer rob Peter to pay Paul,” she said. “We are not in the right place right now, and I don’t know what to do about it.”