portsmouth-dailytimes.com

Council to examine 5-year fiscal plan

By Frank Lewis

August 6, 2013

Frank Lewis


PDT Staff Writer


Portsmouth City Council will meet in special session to review the city’s Financial Recovery Plan Wednesday evening. The plan is required by Section 118.06 of the Ohio Revised Code and was ordered by the Auditor of State’s office since Portsmouth was placed in Fiscal Watch status on April 9 of this year.


As a result of that designation, the city must submit a financial plan designed to correct the city’s financial problems. That plan must be accompanied by a five-year forecast reflecting the actions in the plan.


The plan details that the city is in the process of educating the bargaining unions and employees of the state of the health care system and the need for the city to change the plan it provides for employees and ultimately reduce the cost.


In the plan, Portsmouth Mayor David Malone outlines the history of the city’s income tax revenue and says - “In my current five-year forecast, I have very conservatively projected growth of $50,000, only a little more than one-half percent per year. The figures show $8,150,000 budgeted for 2013, $8,100,000 estimated for 2014, $8,150,000 for 2015, $8,200,000 for 2016 and $8,250,000 for 2017.


The plan says Real Estate and Personal Property taxes have dwindled over the past several years due to the phase-out of the Personal Property Tax and properties being taken for non-exempt entities such as schools and hospitals. Malone says the Property Tax looks to remain stable at the current projected rate of $1,700,000 over the next five years.


Malone makes reference to the recent slashing of Local Government funding from $1,414,387 in 2008 to a current year’s projection of around $600,000.


“As this is subject to a new formula created in the state’s recently passed biennial budget, the local government funding looks to take further reductions, but is currently projected to remain stable at $640,000, pending the outcome and performance of the new funding formula,” Malone said. “This may need to be adjusted over the next few years if a significant reduction is seen.”


Malone reminds the Auditor of State’s office that the Estate (Inheritance) Tax has been eliminated. The city had averaged more than $400,000 per year from that tax. He also said Portsmouth Municipal Court collections will see an increase in the current year with additional police having been hired specifically for traffic patrol. He said the revenue from that activity has remained stable at from $550,000 to $600,000 and should continue to bring in that average of $600,000.


Malone says the city has a franchise agreement with cable TV company Time Warner Cable that provides for a current average of about $240,000 to $250,000 and looks to remain at that amount for the foreseeable future.


He said the City Health Department brings in $250,000 to the General Fund and looks to remain constant with areas for growth with new programs being implemented. The Police Department Special Duty account brings in an average of more than $100,000 per year, but Malone adds - “The account is not a revenue producer because the money that is taken in from the police working special duty, such as PMHA (Portsmouth Metropolitan Housing Authority), private businesses and football and basketball games is the income that is generated to pay those officers for their services while on those special details. However, this is an amount that is constant each year for the duty.”


Malone said in most years, miscellaneous revenue can approach or exceed $100,000, and the remaining General Fund revenues, although far less significant on a line by line basis, still account for an average of $250,000.


Malone said the city’s water revenue usually sees increases in increments of 2-4 percent, and adds, “The water system has seen many upgrades and improvements over the years to the water filtration plant and water supply lines and has carried a large amount of debt for those improvements that will be retired over the next two years providing relief for its operating budget, although more improvements undoubtedly will be needed that require further debt to be issued.


He said the sewerage system has taken on some debt in recent years to upgrade the Lawson Run Treatment Plant as well as the Sciotoville Treatment Plant and upgraded sewer lines. The sewer system has also received near annual rate increases of 3-5 percent. He said the system is currently faced with an EPA mandated combined sewer overflow system overhaul that is estimated to require improvements or at least $5 million.


Malone also mentioned the sanitation rate increase of 2.5 percent enacted by Council through 2022, and that the city beginning in 2013 has budgeted in its departments the cost for insurance premiums and some additional reducing of the insurance fund deficit, “but will not have enough to cover both the insurance fund deficit while eliminating the General Fund deficit.”


Shirttail


Frank Lewis may be reached at 740-353-3101, ext. 252, or at flewis@civitasmedia.com. For breaking news, follow Frank on Twitter @FrankLewisPDT.