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By FRANK LEWIS

PDT Staff Writer

While Portsmouth city officials are kicking around whether they need to balance the deficit budget by the end of 2013, a spokeswoman for the State Auditor’s office says there is no deadline set as to when the budget has to be balanced.

“We have not set a deadline,” Carrie Bartunek of the State Auditor’s office said Thursday. “We’re waiting to see (the city’s) plan. We have not received a plan, therefore, we don’t even know if 2013 or some other year is the deadline they’re giving themselves. We have not seen a plan yet. We’re waiting to see it. And we don’t set a deadline.”

Bartunek said the Fiscal Caution status, placed on the city in November, is simply an early-warning system to allow the city to take control of the situation.

“It is letting them know that there are signs that they are headed down the road to fiscal distress, and it gives them an opportunity to fix those on their own,” Bartunek said. “We don’t bring in any state supervision when it’s Fiscal Caution.”

The question came up when Portsmouth City Solicitor Mike Jones wrote in an email that the State Auditor’s office has been clear as to their order that the city balance its current deficit budget by the end of 2013.

Jones says that as solicitor he has to advise City Council and Mayor David Malone to comply with the state’s mandate.

Jones’ response came to a series of emails among several City Council members, which were forwarded to the Portsmouth Daily Times from Third Ward Councilman Nick Basham.

Basham and Council President John Haas say they believe the State Auditor’s office can’t take action against the city should it not balance its budget in two years.

At a meeting on Tuesday, city officials have said the State Auditor’s office told them they have until the end of 2013 to erase the current $1.4 million deficit and balance the current budget.

Now, Basham and Haas have exchanged emails questioning what the state really has the power to do.

“Gentlemen, back up the budget truck!!,” Basham wrote in an email. “Before we charge ahead with the State Auditor’s request, what will (State Auditor) Mr. (Dave) Yost ‘do’ to Portsmouth if we continue our current plan for repayment? (City Auditor) Trent (Williams) or (City Solicitor) Mike (Jones), I’d like an answer).

Basham wrote in the email that because the city has a budget surplus this year, the state won’t place the city in Fiscal Warning or Fiscal Emergency status.

“I feel like this is sabre rattling from Columbus. If the governor and Republican-led legislature want to take away our funding options, such as the estate tax and local government funding, then they need to quiet down as we (all cities in Ohio) face budget woes,” Basham wrote.

Basham also forwarded to the Times the response he received from Haas:

“I agree with Nick. Let’s see what the FOP contract looks like, bump up income tax projected revenues and allow something for estate tax and let’s move on. I think we’ll be close to the Auditor’s trumped up target with those and a few other smaller things that we’ll escape the illusory sanctions. The Auditor’s position is purely a political maneuver not based on any code section or legal authority. If there is legal authority, the newly elected Republican State Auditor has not produced it to date as far as I know,” Haas wrote.

At last week’s budget meeting, Council said it was able to find a $250,000 budget surplus for 2012. However, according to Portsmouth City Auditor Trent Williams, the city needs to come up with about $700,000 in cuts to be halfway to solving the deficit, leaving a $700,000 deficit to make up in the last year of the target city officials said was set by the State Auditor’s office.

Those emails followed one first sent by First Ward Councilman Kevin Johnson outlining his ideas for helping to overcome the budget deficit, which was also forwarded by Basham.

“It is obvious we are now under the gun to ramp up our effort to find practical cuts to our budget in order to attain a minimum $700,000 budget surplus in both FY 2012 and 2013 so as to eliminate the anticipated $1.4 million General Fund deficit,” Johnson wrote. “I would like to consider my previously suggested proposal to delay replacing personnel in the Fire and Police departments. … Though this may provoke yet another lawsuit by one or both unions representing employees of these departments I have no doubt that any court will take into consideration the dictate/mandate by the Office of State Auditor and that these two departments constitute two-thirds of our General Fund budget.”

Johnson finished with - “Second, seriously consider, for FY 2012 and 2013, one year modified extensions of our various union contracts so that we may adjust to the fiscal realities we encounter in the near future as regards meeting the dictate/mandate by the Office of State Auditor.”

Jones responded to the emails this way:

“The Auditor and I met with representatives from the State Auditor’s Office this week to get clarification on what council needs to do with this year’s budget with respect to the $1.4 million deficit in the general fund. As City Council is aware, the City of Portsmouth has been placed in a state of fiscal caution and must submit a recovery plan to the State of Ohio by January 21, 2012. This plan MUST be approved by the State Auditor’s Office. In order to obtain approval for this plan, the City has been granted a period of TWO (2) years to eliminate the budget deficit. Furthermore, the City MUST reduce the deficit by a minimum of 50% this year to have the recovery plan approved by the State. This is not a request from the State Auditor’s Office to do this. This is what they have instructed the City to do as a result of being placed in fiscal caution. There have been discussions about how the City of Portsmouth is being ordered by the State to eliminate the deficit in 2 years and we are only in fiscal caution while we would have three to five years if we were in a state of fiscal watch or fiscal emergency. THIS IS SIMPLY NOT TRUE. That very question was asked at the meeting this week with the State Auditor representatives and we were clearly told that the period of time to eliminate budget deficits for cities placed in fiscal caution, fiscal watch, or fiscal emergency status varies from municipality. We have been told to eliminate the budget deficit in 2 years and that we must cut a minimum of 50% ($700,000) this year and another 50% ($700,000) next year. Furthermore, we were clearly told that the State Auditor will be monitoring the City on a monthly basis to ensure that we are complying with the recovery plan.

The bottom line is that tough and difficult decisions need to be made. As the City Solicitor, I must advise each member of Council and the Mayor that we have to comply with these instructions from the State Auditor. I know our City Auditor concurs with my advice as well.”

Now, with comments from the State Auditor’s office, the situation may be even less clear than it was following Tuesday’s meeting.

Frank Lewis may be reached at 740-353-3101, ext. 232, or at flewis@heartlandpublications.com.