PDT Staff Writer
The City of Portsmouth may be in somewhat better financial shape than first projected. City Auditor Trent Williams filled the Portsmouth City Council in on the city’s third quarter update, giving them the financial figures through Sept. 30.
“They are actually good,” Williams said. “General Fund, at the end of September - as you will recall, we stood at nearly $1.4 million at the beginning of the year, but at the end of the third quarter we were at negative $967,000. Our goal, if you will remember, about being placed in fiscal caution status, was to be at negative $700,000 by the end of this year, and back in the black by the end of 2013. We had a little snag with the charge off problem, that re-directed between $300,000 and $400,000 from the General Fund, back to the enterprise funds - however, that number of $967,000 includes those transfers. And that is where I look to be at the end of the year, if not better.”
Earlier, the State Auditor’s Office informed the city that the city funds transferred from revenue accounts at slightly less than $400,000 as a part of the city’s practice of using charge-offs, was to be returned to those accounts.
Because of the transfers, the city’s deficit, which had been cut to a projected $700,000 next year, was expected to balloon to approximately $1.5 million.
Even with the nearly $400,000 fund transfers, Williams is now predicting that the deficit will not go back up to the projected $1.4 million, or even to the $1.1 million that had been discussed in a previous session. Last November, Portsmouth voters approved an income tax increase and Williams said the collection of that increase had a major impact on the new figures.
“Part of that is due to the income tax collection this year, which right now on their own, had they not been increased, would have been up over last year by $140,000 in collections,” Williams said. “That’s just for reference because, to show you where the new tax has put us, with the increase we are now at plus $1.8 million over last year, and $1.7 million of that is attributable to the collections from the new tax, which makes up the difference of us being up $100,000 on our own, plus the $1.7 million from the new tax, puts us where we are at $1.8 million over last year.”
Williams said those figures are right on track with his projections that the additional six-tenths of a percent tax on income will generate about $2.1 million.
“I told you it wouldn’t generate its full amount in its first year, because we would still be collecting taxes that came in from 2011 income,” Williams said. “That means that wouldn’t settle in until about the third month. But we will collect right at $2.1 million for this year with the new tax, and for 2013, we should be able to count on, given the same economic conditions, about $2.5 million, the minimum, and that’s in a poor economy.”
Williams said the total tax revenue for this year is more than $8 million for the first time ever.