PORTSMOUTH
The nearly $4.7 million the city borrowed but never spent to construct a new Behavioral Health Care office is sitting in a bank account.
With interest, Portsmouth currently has about $5.1 million in an account with U.S. Bank, the city’s chief financial officer, Betty Burrell, told the City Council this week.
Portsmouth officials took out a $4.66 million loan in 2004 to build a 30,000-square-foot facility in the 1700 block of High St. The purpose was to consolidate services for the city’s behavioral health care clients on one site. City management has changed several times since then and the building was never constructed.
Portsmouth may have to pay some of the $635,000 it has earned in interest on the unused money to the Internal Revenue Service, Burrell said.
Since January 2005, the city has paid $971,852 in principal and interest on the loan, Burrell said.
Last week, city leaders said they weren’t sure where all of the money was.
“I saw the bank statements and all the documentation,” Councilman Ray Smith said.
Smith said the project came to a “screeching halt” about a year ago when council members were informed that more money was needed to complete the project.
The city had hoped to repay the loan with money it saved from leasing the buildings Behavioral Health Care’s services currently occupies.
Smith said council is waiting to hear from City Manager Ken Chandler about recommendations on which major projects they should tackle in the upcoming budget year.
City leaders need to find better accommodations for its behavioral health services if it’s decided that a new building won’t be built, Smith said.
Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com
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Clean the Council and Management Slate.
Ptown is in desparate need of new council members! Repetitive wasteful spending. Lets get new council members who go back to the basics, quality neighborhoods, quality schools, quality business. The desire of maintaining safe communities to attract residents and businesses seems to be forgotten. Millions has been grossly wasted on the Harbor Center pavilion, poor season after poor season, and council smiles and says "thank you-good job" Now lets waste more taxpayers money on a traffic circle that exceeds 2.2 million! Missplace 4.7 million! Hire consultant after consultant, fail to give the water dept monies for the infrastructure that will fail us in the near future, fail to pay the police competitively so we continue to supplement the neighboring cities with qualified trained officers! Repair Churchland bridge, build sound barrier as promised in West Norfolk, and on and on...
Vote for change in Washington and Portsmouth, we need real leadership and competent management, clean the slate in 08!
P-Town Citizens Beyond Frustration
Wasteful spending, false real estate assessments in a falling market, questionable city/private development projects that cost tax dollars and city owned property, poor city services, city council meetings conducted like Church services, giving tax authority to HRTA that everyone knew was Unconstitutional and evidence of possible malfeasance, serious problems with police such as the detective who worked with drug gangs and still gets a citizen paid for pension, poor planning and construction of storm water drains that actually flood the Old Town section of Tye city and they have raised real estate taxes there, etc etc etc.
Unbelievable
Is This The Blind Leading The Blind or The Left Hand Doesn't Know What The Right Hand Is Doing?
Someone could write a successful comic strip about this city.
...sigh!
Maybe there should be a new law or criteria in place that says you should have a college degree in, or some kinda training in business administration or accounting or something before you can serve as a city council member. It is beyond me how you can misplace 4 million dollars. Thats just crazy!!!If you keep voting in office the same poor leadership and planners, then this sort of thing will continue to happen. Citizens of Portsmouth arn't you ready for a change?
Cleasn Slate in 2008!!!
Time for heads to roll and city leaders to get a grip.
This is a prime example of reckless and runaway council and appointed officials. Betty Burrell should ultimately be held responsible and should be dismissed immediately. Then whoever is the finance officer on the project was should be the next head to roll. When $5.1M is treated like fifty cent, then it's time for a change in officials. The math on this one isn't adding up either. P-town borrowed $4.7M and now has $5.1M in the account. That's $400K in earned interest, not $635K as the article states. Everyone knows that at the beginning of a long term loan, most of the payment goes toward interest and very little towards principle. That being said, most of the $972K in payments made went towards interest. So when the dust settles P-town taxpayers have lost about $1M of their hard earned funds all thanks to the incompetence and recklessness of city officials. Then there's the quote, "Smith said council is waiting to hear from City Manager Ken Chandler about recommendations on which major projects they should tackle in the upcoming budget year." Wouldn't it be wise for the city to get control of what they are doing NOW before diving in for more? It's only TAX dollars!
Portsmouth... "Borrowing Needless Money and Forgetting About It"
"Finds Money"... Makes it sounds as if this whole thing is something positive. How much money does the City squander on intrest for loans that they forget about? No one in the private sector would still have there job if this happened at there office.
Perplexed. I'm Not A Wizard Of Wall Street Here
And maybe my ignorance on this matter is showing through, but I'll say it anyway. To me it sounds strange if all you have done is draw interest on borrowed funds.. Usually, when you borrow money, you pay a higher interest, than you are paid when you save money. If it was profitable to do that, everyone would be borrowing money, putting the funds in savings, & living off the interest, & banks would be loosing money on every transaction. Somehow I doubt the bank would go for that arrangement. So why would they have to pay the IRS?..what am I missing here? When cities borrow money do they borrow it interest free?, or has the IRS found a way to tax you on a deal where you lost money? confounded here & demand an explanation..lol