$120M Portsmouth city budget looming
By Chase Hagaman
Posted Feb 24, 2019 at 4:34 PM
Updated Feb 24, 2019 at 4:34 PM
A light snow was beginning to fall during a night-time drive down Penhallow Street toward Bow Street. With my eyes on the powdered road and not the horizon, it took a moment to notice the enormous object floating before me. Distinct yet somewhat camouflaged by the snowy haze, I was captivated by a ship in port unloading a fresh supply of salt.
That is how I picture the Portsmouth budget - big, heavy and somehow unnoticed until its sheer mass is right in front of us.
According to city figures, the fiscal year 2020 preliminary operating budget, including collective bargaining and proposed initiatives, could grow by as much as 5.7 percent. The preliminary non-operating budget, which includes debt service, capital outlays, county taxes and more, could grow by 4.7 percent.
If approved, that would push the total city budget up by more than $6 million topping $120.5 million. Excluding proposed initiatives, the budget would still hit $119 million. Each year seems to set new records, with the operating budget regularly growing faster than inflation.
I am not proposing slashing the city budget. Rather, I would advocate for more targeted spending on investments that also help manage the impact of workday demands and tourist season. But a handful of costly issues, largely responsible for driving city budgets to new heights, also needs to be addressed.
The city is aware of and has outlined some of the key factors having an impact on the FY20 operating budget: cost-of-living-adjustments from collective bargaining agreements, retirement costs, health insurance premiums and worker’s compensation.
It seems rather timely that 12 of the 16 union contracts for the city are set to expire at the end of June.
Most of those contracts stipulate that cost-of-living-adjustments can be no less than 2 percent, even if the applicable measure of inflation (Consumer Price Index) is lower. The applicable CPI has averaged 1.8 percent over the last decade. Perhaps the COLA should be amended to help slow budget growth and better reflect economic changes.
Next fiscal year, the city is projected to cover 92 percent of the $13.9 million in health insurance premiums for city staff and employees. Perhaps a discussion is needed on cost-sharing and how much of those premiums the city should continue paying.
Of course, these issues and other trends that impact most city departments should be addressed carefully and as fairly as possible.
For instance, 85 percent of the Police Department’s FY19 budget was salaries and benefits, and other departments struggle with similar budget proportions. Police also experienced a nearly 25 percent increase over the last decade in the cost of salaries and wages, even though staff levels remained relatively flat. Again, other departments have experienced a similar trend.
The cost of overtime for both fire and police often exceeds half-a-million dollars annually, which prompts the question, would it be more cost effective to limit overtime but hire more staff?
And while fire and police have seen an increased demand for their services, the School Department has experienced a leveling off - if not a slight decrease - in student enrollment.
Added revenue would certainly be a boon to the budget, but increased funding from the state seems unlikely. The largest source of city revenue is property taxes, which is the very burden many hope to reduce. The city could instead explore increases in various fees or get creative.
For example: engage in investment-oriented spending that provides a return - like transportation and parking infrastructure - or bolster public-private partnerships that offset costs - like with the McIntyre project or Zagster.
We could bring back an ordinance that would charge a fee in lieu of meeting downtown off-street parking requirements. A 2010 report recommended the original fee structure be repealed because it failed to achieve its desired outcome and was overly burdensome to businesses. I wonder if it would now be more effective, perhaps by applying a lower fee that is collected over a longer period of time, with any generated revenue earmarked for off-street parking and downtown-oriented transportation.
Portsmouth is well managed and well staffed. Our hard-working city employees deserve good wages and benefits, and continuing to attract talent is important, but part of Portsmouth’s vibrancy is its culture. Maintaining that culture and working to reduce gentrification requires improving affordability.
Although the City Council does not really engage in line-item decisions concerning the budget or directly negotiate union contracts, it can push back, provide guidance on broader policies and suggest priorities.
Making tough choices could alienate some stakeholders, but one way to try to avoid that is by inviting all to the table and working to find compromise.
With the possibility of a $120 million city budget looming, the conversation between now and its scheduled adoption June 3 should focus on an effective use of resources that also lightens the proverbial load. Share your ideas with city leaders too, and we will work through the positives and negatives of reform together.
Chase Hagaman is a community advisory member of the Seacoast Media Group’s editorial board, New England regional director of The Concord Coalition and host of Concord’s weekly radio show and podcast, Facing the Future.