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<br />March 30, 2015
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<br />At a Called Meeting of the City Council on Monday, March 30, 2015, there were
<br />present:
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<br />Mayor Kenneth I. Wright, Vice Mayor Elizabeth M. Psimas, *William E. Moody, Jr.,
<br />Paige D. Cherry, Danny W. Meeks, *Dr. Mark M. Whitaker, City Manager John L. Rowe,
<br />Jr.
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<br />15 - 136 - The following call for the meeting was read:
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<br /> "Please attend a Called Meeting of the City Council to be held in the City Council
<br />Chamber, 801 Crawford Street, 6:00 p.m., Monday, March 30, 2015 for the purpose of
<br />the presentation of the proposed Operating and Capital Improvement Plan Budgets.
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<br />In addition, you may consider a motion to go into a Closed Meeting.
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<br />By order of the Mayor."
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<br />15 - 137 - The following item was discussed in Public Work Session:
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<br />1. Presentation of Proposed Operating Budget and Capital Improvement Plan by John
<br />L. Rowe, Jr., City Manager
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<br />I am submitting to you for your consideration my Fiscal Year 2015-2016 Proposed
<br />Operating and Capital Improvement (CIP) Budget.
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<br />This budget invests in our community, our Schools, and our employees. We have
<br />developed this budget in the context of City Council’s priorities, the critical needs of our
<br />community, and the need for the City to be fiscally responsible in providing sustainable
<br />funding for its expenditures, especially its operating expenditures.
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<br />In this regard, this proposed budget matches ongoing expenditures of both the City and
<br />the Public Schools with ongoing revenue sources. This action also meets the
<br />requirements of City Council’s Adopted Financial Policies regarding balanced budgets
<br />and the use of one-time funds. In order to meet this financial necessity, I reluctantly
<br />recommend that the City increase its real estate tax rate by seventeen cents, from
<br />$1.27 per $100 of assessed value to $1.44 per $100 of assessed value. This increase
<br />restores the City’s real estate tax rate to its Fiscal Year 2005-2006 level, and corrects
<br />for years of tax revenue decreases caused by falling assessed values of property.
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<br />No City Manager likes to recommend a tax rate increase, but the only other option to
<br />close the $11.7 million gap between revenues and expenditures is to cut services.
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<br />The City of Portsmouth is not a service rich city – we provide basic and essential
<br />services to our community, including Police and Fire protection, Parks and Recreation,
<br />Street Maintenance, Libraries, and Museums. Further, our departments are funded at a
<br />very lean level compared to other communities. Department budgets were cut
<br />repeatedly during the economic downturn, and they cannot sustain further cuts without
<br />a commensurate reduction in services. I cannot in good conscience recommend
<br />closing a library or recreation center, or reducing the size of our public safety staff, as I
<br />believe the long term consequences of doing so will harm both the City’s economy and
<br />quality of life for our citizens.
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<br />For the past two years, the Budget team and I have scrubbed the City’s budget, revising
<br />revenue estimates to ensure they are reasonable, cutting unnecessary spending and
<br />providing as lean and nimble an organization as possible. In addition, we looked
<br />strategically and recommended actions such as issuing pension obligation bonds to
<br />restore the City’s underfunded pension systems to financial health, and restructuring our
<br />post-employment benefits to conform to best practices, reducing our health insurance
<br />costs by over $2 million per year. As a result, I was able to propose budgets for the
<br />past two years that achieved the City’s top priorities while maintaining a level tax rate.
<br />Last year, I told you that we had “pulled all of the rabbits out of the hat,” and that future
<br />budgets would require revenue adjustments in order to continue providing the same
<br />level of services to our community.
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