PORTSMOUTH
The city's financial planner will tell the City Council today that Portsmouth could face a budget shortfall of up to $13 million this fiscal year if adjustments aren't made.
Not even 90 days into the fiscal year, which began July 1, the financial planner, Davenport & Company, said at a Monday work session that the city appears on track to spend more than it has in the general fund - as the city has for the past two fiscal years.
The general fund, which is $225.2 million of Portsmouth's $562.2 million budget, is composed of taxes and fees the city levies and state aid.
The weak economy, poor housing market, reduced state aid and falling tax collections could help create the shortfall, said David Rose, senior vice president at Davenport & Company.
Included in the shortfall is the $7.1 million in potential savings from city staffing changes that haven't taken place, Rose said.
City Manager Kenneth Chandler said he expected to receive figures from the study by the week's end.
City leaders emphasized that projections heard at the work session Monday and other budget meetings is preparing them to make tough decisions. "We're creating a road map for Portsmouth in a difficult economy," Councilman Doug Smith said.
Portsmouth's Commissioner of Revenue Franklin D. Edmondson said he was hoping for the best but preparing for the worst.
"We're going to work very diligently to do what's in the best interest for the citizens," Edmondson said.
Another shortfall would make three consecutive budget years that general fund spending outpaced revenues, according to Rose.
He said the city has helped balance budgets with money from legal settlements totaling $4.2 million.
Portsmouth officials have also tapped the city's undesignated or rainy day fund and transferred money from the utilities fund to balance the budget. He advised against those practices.
Rose also said the returns from fiscal 2008 continue a trend of aggressive revenue budgeting while the city has consistently fallen short on its estimates for real property tax collections.
The revenues for fiscal year 2008 were estimated at $10.6 million less than was budgeted. City leaders reduced much of the gap with cost-cutting measures. The final estimated shortfall is $6.5 million.
In fiscal year 2007, Portsmouth's general fund deficit was $2.3 million, Rose said.
Meanwhile, the city needs about $124 million for capital projects it has approved from fiscal year 2008 to fiscal year 2013, according to Rose.
But Rose said Portsmouth has a good record of paying back debt quickly.
Councilman Charles B. Whitehurst Sr. and city managers emphasized it is important not to dip into the city's undesignated fund.
Smith rejected the idea of a tax increase and asked people to keep perspective on how fair the city has come in terms of economic development.
"We couldn't pay our bills just a few years ago," Smith said.
Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com
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Cut social Services...
As a Portsmouth taxpayer, I do not want the funds cut from anything that directly benefits me. Cut it from budgets that are spent on people that don't pay into the tax coffers. Does that sound politically incorrect? You bet. I'm I being selfish? I don't think so. I donate cash and goods to several charities, I donate blood, and I volunteer time with various organizations. I believe in helping those who need it. But I'm tired of hand-outs taking priority over schools, roads and public safety. By requiring people who live off of public assistance to get jobs, the state and city reaps funds from payroll taxes, and reduces the need for medicaid, food stamps and free or reduced housing. The money spent on hand-outs would be put to better use if dedicated to education that encourages self-sufficiency. If you are not disabled or elderly - get a job!!! That would solve a large portion of the problem.
Wasteful spending
I can see it coming, another real estate tax increase. That seems to be couoncil's answer to everything. Has the city ever considered down sizing the work force. How about starting with the position created to administer the Holiday Inn project and the court house. Since the Holiday Inn project is on hold, and the city can't afford a court house, has the person hired to administer it been let go?
How about some of the code inspectors. Just recently I heard the city has an inspector to check back flow preventors. Not that is unimportant but is it really necessary to have some one dedicated to this task.
BOHICA!
Investment
Maybe Lucas and her group should directly support the Portsmouth government, including the mayor. Investing directly would show more dividends quickly in quality of life issues in Portsmouth than a "black" convention center and hotel! No wait, she's an elected official, she'll find a way to finance her project with make believe Portsmouth funds. Portsmouth and Norfolk, both jokes in the area! If it weren't so shameful I would laugh.
Lucas to the rescue.
Lucas to the rescue. Ask her, she probably has a plan.
"Like the economy"...Its'..
..Portsmouth dummy! Five years and still going strong...straight down!
Amen Ring442!
I concur 100%. Instead of passing out the handouts year after year, baby after baby, how about let's NOT make that a way of life in Portsmouth. Aren't we supposed to be "revitalizing"? Start with the welfare abusers and you'll save alot.
Again, the know nothings comment
Police officers using their city cars is the only reason more officers haven't quit. The extra money spent on fuel doesn't even come close to adding up to what it would take to pay that same officer a comparable salary to ANY of the other cities, PLUS, the presence of a police car is a deterrent to crime. The city won't spend money filling up ditches, because it has a large upfront cost, and the people who manage our city are incapable of seeing more than 5 minutes into the future. Instead they spend it on that idiotic traffic circle that had no purpose, but cost more than 4 million dollars on the last report of this paper, and putting new fences in City Park and around the cemetary. Very pretty, but unneeded. The amphitheatre, Rennaisance hotel, the church lawsuit, Holiday Inn, spending a fortune rehabbing buildings just to tear them down, and of course, PPD. It takes 5 or 6 officers to do what 3 should be able to do, because the experience leaves. But we keep electing these incompetents to City Council, so they must be doing a good job.
SHORTFALL
Why doesn't the city just raise the boat tax to 100% of assessed value? That should make up some of the difference. However, it will be short lived as the boats with any value that still remain will soon depart.
Saving Money
Rather than allowing Police Officers to use their cruisers as personal vehicles, rather that purchasing special emergency equipment that no other city in the area have, rather than increasing the number of watercraft the City has, why doesn't the City start spending money in a smarter fashion.
here's an idea
Go back to the Social Services/Welfare budget of 2 years ago and that will save 12 million. Oh wait. That would interfere with P-towns 10 year plan to bring more gangs and homeless to the city.
Budget Problems
I think the city needs to look at all facets of how it's run. Every month or so there's 2 workers in our neighborhood cleaning out ditches. Why not put pipe in the ditches and cover them up? Not only would it improve the looks of the neighborhood but it would cut down on the expense of upkeep over time.
Additionally, Seems like there's way too many workers over at City Park. Is the City payroll bloated with too many employees on the payroll?
How much of Portsmouth has been taken over by the federal government (i.e. NNSY, Naval Hospital) where the city gets no tax income? Maybe it's time for them to push on Congress to pay for the free ride.
Take a look at the school crossing guards. When I was in school we had students working the crossings as School Patrols, didn't cost a cent and worked pretty good and gave the students something to be proud of. I've seen guards on corners that are not even within sight of the school they're suppose to be guarding.
All the "big ticket items" catch everyone's attention. But there's a lot of small items that could add up to some real cost savings at little loss to the city.