Something borrowed, nothing new for Portsmouth

PORTSMOUTH

About four years ago, the city borrowed nearly $4.7 million to build a new Behavioral Health Care Services office.

The downtown facility was touted as the most efficient way to provide and improve mental health, drug rehabilitation and food stamp services.

But the building still hasn't been constructed. And now, Portsmouth is paying back the loan - with interest - for a project that never happened.

City Manager Ken Chandler likened the situation to a homeowner borrowing $20,000 from a home equity line and putting most of it under a mattress.

"It's a situation we're looking into," Chandler said.

The discovery comes as Portsmouth struggles to pay for other projects with an increasingly strained debt load.

City leaders want to borrow money to build a $45 million Circuit Court. However, an analyst warned last month that the project would put Portsmouth more than $7 million over its debt limits both in 2010 and 2011.

The $4.65 million for the behavioral services building is included in the city's current debt load.

The 30,000-square-foot health care building was to be built next to the Social Services office in the 1700 block of High St.

For years, the city's behavioral health care clients have had to visit one office for mental health treatment and another for drug rehabilitation, then travel across downtown to receive food stamps or pick up prescriptions from the health department. All those offices - at PortCentre Commerce Park, on Dinwiddie Street and another in the Professional Building on Washington Street - are leased by the city.

In 2004, Portsmouth was spending about $360,000 annually in rent for the Behavioral Health Care department. The Pilot was unable to obtain the current lease amounts. Portsmouth Chief Financial Officer Betty Burrell and Behavioral Health Care Services Director Bill Park did not return multiple phone messages left over several days this week.

Kimberly Pruitt, assistant to the city manager, said construction of the building was originally scheduled to begin in fall 2005, but Hurricane Katrina hit and costs skyrocketed.

The $4.65 million bond was supposed to be repaid with savings the city would see when it no longer had to lease space for its Behavioral Health Care offices. Because the city is still leasing the buildings, it has had to use other money to repay the bonds.

Chandler said he thinks the money is in an account. A small portion - it is unclear exactly how much - has been spent on engineering and architectural work, Chandler said.

City Councilman Ray Smith said he wants to know exactly where the money is.

The situation is complicated by the fact that Portsmouth has had three city managers and three chief financial officers since the council approved borrowing the funds in April 2004.

"I'm not going to try to hash over how this happened or why this happened," said Smith, who wasn't on the council when the money was borrowed. "We know the answer. There were mistakes, and somebody didn't make the right decisions.

"But it's not going to accomplish anything to look back," he said. "Some of the people responsible for that aren't even here now."

Whether the city moves forward with plans to build a new Behavioral Health Care Services building is now in question. Portsmouth was set to borrow an additional $3 million to cover the increased construction costs this year.

Smith said the budget crunch may mean that other needs - including the courthouse and infrastructure work for a new office and retail complex at the downtown waterfront Holiday Inn site - will trump plans for more city offices.

The council is set to finalize the city's construction priorities next week.

Designs for the behavioral services building are still being worked on, Chandler said. New city staff - Chandler, Burrell and Pruitt all started within the last year - are making sure that if the project goes forward, the plans drawn up years ago will include enough space for all of the city's services.

"It would be a sad thing to complete a project of this magnitude and still be leasing space," Chandler said.

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com