PORTSMOUTH
While struggling with finances for the upcoming year, city officials have realized a more immediate problem: Portsmouth has a $5.5 million shortfall in its current budget.
The city now has four months to sharply cut spending and bring its finances back into line.
“We’re going to have to look at some of everything,” City Manager Kenneth Chandler said. “There’s nothing off the table.”
He said that, by the end of the week, Portsmouth would implement a hiring freeze, eliminate most employee travel and training, and call for conservation measures in everything from gasoline to electricity.
All those actions are expected to trim only $1.3 million in spending from the city’s $550 million budget, so the city also will be looking at larger budget costs, possibly delaying some projects and contracts until the new budget year begins July 1, Chandler said.
Last spring, the City Council approved a 10-cent tax rate reduction and a budget balanced only with the use of $3.9 million in rainy-day funds.
At a City Council budget meeting Monday night, Vice Mayor Marlene Randall said the council had bought into a “rose-colored picture with a pretty frame.” The city’s tax revenue has fallen short of last year’s projections by more than $1.5 million.
“It was not reality,” Randall said. “If we had had this message ahead of time, maybe we’d have cut back a little sooner.”
Last year’s budget also included a call for a 6 percent reduction in salary costs – a $3.9 million savings – but the city never put a plan in place to achieve that, chief financial officer Betty Burrell said.
She said city leaders were drawing up a policy now to reduce positions through attrition. Chandler added that Portsmouth likely would be hiring only public safety and health employees in the near future. Three new hires he was set to approve today have been put on hold, he said.
“There’s no finger-crossing here; we’re going to plan,” Burrell said.
Chandler and Burrell, both of whom were hired last year after the budget was set, said the shortfall was distressing because the city was already faced with difficulties in balancing the upcoming year’s budget.
Portsmouth’s early projections show an $8.9 million shortfall in the upcoming year, even with no employee raises and a 5 percent cut in departmental spending. Newer projections are expected to be released Friday, Burrell said.
City Council members said Monday night that they still hoped to cut taxes by 3 to 5 cents per $100 of assessed value and to increase the salaries of police officers and firefighters.
But with reductions in state funding and many projects on the table, members said the city would have to look closely at everything that goes into the upcoming year’s budget, making sure not to repeat the shortfall situation the city is in now.
“We’re going to have to stand tall and say we cannot afford to do this at this time,” Randall said. “That’s been something we’ve been reluctant to do.
“Right now, as a city, there are promises that we’ve made that we aren’t going to be able to keep.”
Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com
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Sorry....
Same ole thing, but sorry, the medics cant respond to the accident scene due to lack of funding. Sorry, but the fire department cant put out your house fire due to lack of funding. Sorry, but the police cant stop the criminals due to lack of funding. This is a sorry state of affairs.
Wish we'd known sooner???
Ms. Randall - you are a member of the council that accepted, and passed this current budget. You represent the citizens of Portsmouth, and are informed at frequent meetings of the citizens' concerns, and the state of the city.
If the budget called for a "plan" to reduce spending/salary - why did council not follow up with management to ensure that plan was in place? Waiting eight (8) months and saying "wish we'd known sooner" is woefully irresponsible. You (and other members of council) knew in May/June 2007 that this was coming, when the budget was passed. You've all known through the fall that income was lower than projected.
Why is this a crisis as we approach the fourth quarter of this fiscal year? Where is the attention to the critical issues - employee retention and pay, downtown-old towne flooding, road conditions, public safety radio reception? How much will the city be paying for Skipjack? How much will the city be paying to bail out TodiFest? How much will the city pay to bail out the Pavilion? There is ONE (1) event on the Pavilion schedule, 23 for Chrysler Hall, 4 for Scope, 5 for Virginia Beach Verizon Amphitheater..... where are the events?
Not only are they spending
Not only are they spending money based on projected real estate tax increases, they are also raising real estate property assessments based in inflated values that are no longer supported by the market or reality. Some of us are dealing with rising mortgage payments based solely on rising real estate taxes.
Portsmouth City Council Incompetence
Citizen of Portsmouth, do you recall, the contract for grass cutting, awarded some time ago, to an unknown company, by our city council. That the company in question did not even own one lawnmower or have employees to do the work. That the work, contracted and paid for, went undone for months. Remember we citizens having to cut the over grown grass and picking up trash ourselves, all over the city on city property (which in reality is the property of we citizens). That fact and subsequent actions and spending by our city council, in my opinion, points to incompetence and maybe even malfeasance. Especially when applied to giving illegal taxing authority to the Hampton Roads Taxing Authority. ( there is no such legal entity as Hampton Roads)Anyone with any common sense and remembrance of the Savings and Loan Scam and cover up, knew with certainty, that the rise in home values was deliberately false and miss leading. For our city council to spend money it did not have based on the false rise real estate taxes, on so obvious a bubble, was beyond foolish, it boarders on criminality, for the harm it will do to our city and it's citizens.
Portsmouth Waste
Waste of money has been a game of City Council - 2 million for a traffic circle, 1 million for failure to follow sound advise on a separation of church and state issue, another 2 million (1 million each) to settle employee compensation issues. And how about unauthorized use of city vechile by our 82 year young Mayor, taken for his full time personal transport - and the settlements for his four wrecks, most recently on a Sunday afternoon in Newport News with an HRT bus. Should the City be required to present Mayor Holly with an invoice for cost of the vechile and insuranace claims paid on his behalf?? Or has the city reported this to the IRS as compenmsation?? This could be the first step in reducing extranious overhead cost.
cut spending?!?!?!
My GOD what a novel idea. Applying a household's budget to a city; pay the necessities and do away with [or curb] the nice-to-haves.
Makes me wonder how other city council members can make ends meet in their personal lives the way they spend OUR money...
How about cutting back on
How about cutting back on some social programs in order to force some of the tax leaches to other surrounding cities such as VA Beach.
Ironies of the day
Thank goodness they cut the taxes last year because if they hadn’t you know they would have spent that too! Of all Cities, Portsmouth should be expanding their public safety budget and not spending on all their fat cat building projects. Watch out citizens of Portsmouth, you can expect a rise in crime and a shortage of police officers to deal with it. Crime does pay especially when there's not enough police officers to properly patrol the streets.
Chandler said,
"All those actions are expected to trim only $1.3 million in spending from the city’s $550 million budget". Hey Chandler! I know how to save over $14M by cutting one huge wasteful project! That's the eye sore plan that the city has for the Holiday Inn site. $14M is just the beginning of the savings the city could make by stopping that foolish, wasteful project right now. Then sell the land to private investors for it's market value and provide NO subsidies to develop the location. The city still would have control of what goes there but would not be paying to have it built, then would benefit with the taxes on the completed project. I'm tired of seeing the cart put before the horse. It's not the governments place to subsidize or build projects that should be private entities. Politicians looking out for their friends and families are costing us too much in tax and it's time for it to stop. Yet we continue to vote the same crooks in. It's time for TERM LIMITS to stop that and it's time to start voting out all incumbents. VOTE-EM-OUT!
A rose-colored frame?
No, I think you bought into a 24kt gold frame and expected taxpayers to shoulder the bill. I am glad to see that at least ONE HR locality is actually going to work on SPENDING to fix their budget shortfall. What a novel concept! Will you folks please send some elementary budget lessons to the blockheads in Va Beach's city government? They can surely use (really need) your help.
I am amused by this epiphany though: “It was not reality,” Randall said. “If we had had this message ahead of time, maybe we’d have cut back a little sooner.” I have news for you Randall, sky-rocketing real estate values are NEVER reality! Budget properly based on NEEDS first, then some WISHES, and find a balance in the middle with reasonable tax increases (adjusted for inflation using the CPI), and you'll still find a little money for you pork projects. The way the cities in this area have been budgeting should be criminal.
Wake up folks! This is your elected local government at work, and we're all getting the shaft. Randall's quote stuns me, I just can't get over it... God help us, please!