Portsmouth City Council has passed a deficit budget, much of it on the back of the city’s Capital Improvements budget.

Asked how Council can pass a deficit budget if it is against the law in Ohio to do so, Mayor Jane Murray said she is asking the State Auditor for an analysis review and options.

“I have already been in conversations with them, and they have indicated they will take a review of what has been adopted and give me some options,” she said.

The budget reflects a final negative balance of $651,371.

In the final analysis, Council decided to take $940,000 out of Capital Improvements (CIP) to make the Ameresco payment, leaving big holes in the CIP budget.

Murray commented on Council’s usage of CIP funds to pay for Ameresco, a project in which the city entered into a contract for a $7.5 million dollar lease for such things as new water meters, which has recently come under scrutiny by city employees who say they had to re-install meters.

“They moved to pay those out of the Capital budget, which is budget 301, from whence we get materials, equipment, supplies, to do our work — also street resurfacing,” Murray said, following the meeting. “So nearly $1 million was transferred to pay for Ameresco. In addition to doing that, they are projecting a nearly $1.1 million deficit. So they passed a deficit budget.”

Murray was referring to the part of the budget passed Monday night which reflected a projected year-end balance of $1,192,029.

Murray said the transfer is significant in that it not only reduces the CIP, but Council also put an additional $830,000 of costs in the fire department from the city’s Water Revenue account, “which is the revenue that we use to fund our improvements to our water system, our drinking water system,” she said.

Murray said Sam Sutherland, director and assistant director of the Water Treatment plant, and Jeff Peck, director and assistant director of Wastewater, are reviewing those fund balances to see if there is any money there to fund the projects that are ongoing and to fund the ones the city has on the drawing board.

Sixth Ward Councilman Rich Noel said the U.S. 52 widening project is already passed the deadline, and said this budget will pretty well knock out all the city’s infrastructure work.

“Unless we get a huge windfall currency from somewhere, we’re going to be in deep water by the end of the year or before,”

Noel said. “My conscience won’t let me vote for something I don’t think is going to work.”

City Council passed the measure 5-1 with Noel casting the lone dissenting vote. Council also passed an ordinance to amend the salary ordinance, by a 4-2 vote, with Noel and First Ward City Councilman Kevin Johnson voting against the measure.

Murray was asked what will happen with programs such as street resurfacing, which comes out of the CIP.

“I’m bringing what’s left in the Capital Improvements budget to the Council in their packets for the next meeting,” Murray said. “Given what they’ve done in this budget, my guess is that whatever I put in there they are not going to approve. I’m trying to eke out as much money as I can to pay for street resurfacing. Our streets are a disaster. We know that. They haven’t been paved in years. There has not been a street paving program.”

Murray said the city has a proposal currently before the Environmental Protection Agency on the dry basement program to address the sewer backups into basements.

“We need monies to pay for those projects,” Murray said. “The way you do it is you pay for the loans and the matching grants you have out of those enterprise funds — out of the sewer and water funds — so I’m very concerned about how much monies are left there to pay for these capital projects.”

Murray said when the city gets a grant, it has to come up with matching monies, and oftentimes that is in the form of a no-interest or low-interest loan.

“We’re applying for that right now for our long-term control plan on our sanitary sewers and our dry basement program. So we have to have monies out of those accounts for these projects, or we’re going to lose millions and millions of dollars in funds,” Murray said.

Murray again brought up what she perceives is a difference between the state loans she has proposed and the bonded indebtedness limit of $100,000 passed by Portsmouth voters last year.

Recently, Portsmouth City Solicitor Mike Jones gave his opinion that any move to do what Murray wants to do would be in breach of that ordinance. Murray disagrees.

“Loans are not bonds. They are a different financial instrument altogether. But now we’re tied up. We’re losing the 52 widening project. It went from a project in (20)07 when it was approved of $400,000 to what it is now — $730,000. We had it all lined up where the city was going to be borrowing its portion from a state infrastructure bank, that the previous administrations had no knowledge of. But in meeting with ODOT (Ohio Department of Transportation) they told us about it. It’s a perfect instrument for financing that project. And I had a plan in our capital budgets as to how we were going to re-pay that loan. Mr. Jones raised the spectre we couldn’t do that, because of the bond limitations that was passed by the voters in that special election.”

Murray said she believes that everything that is being done by City Council is for political reasons.

“Passing the budget is the Council’s job. However the presentation of the budget is the Mayor’s job,” Murray said. “The City Solicitor and the City Auditor drafting a budget? What is that all about if it’s not politics.”

Murray said what she is going to roll out is what she has said she had promised to do for the people.

“We’re starting to tear down houses that need to be torn down, that were next to people, that were burned out two years ago,” Murray said. “We’re starting that tear-down program. We got the bids in. I looked at the list today. We’re going to get twice the number down for the same amount of money, because people sent in lower bids. So, by the end of May we’re going to have the first 15 houses down, and the next 15 are going to be ready to go a few weeks after that. I’m still going to find bits and pieces of Capital monies that we can start improving our parks. And we will, one way or another, do this dry basement program. It’s too essential.”

FRANK LEWIS can be reached at (740) 353-3101, ext. 232 or flewis@heartlandpublications.com