The city of Portsmouth has created a new fund that will serve future needs. Portsmouth City Manager Derek K. Allen is calling it the Building Reserve Fund and will start the fund with $50,000.
“The purpose of this is to take the $50,000 we got from selling the Babcock building and placing it in a fund for reserves so it’s not part of of our general operating. It’s just there for the future,” Allen said. “And if we’re successful in selling the Adelphia property, then my recommendation would be to deposit the money in this fund and it’s kind of off limits to everybody.”
At the next Portsmouth City Council meeting scheduled for Dec. 27, 2016, the council will give first reading to an ordinance establishing the fund. When the city first sold the Babcock building to Portsmouth Pediatrician Dr. John DiTraglia, it deposited the money into the General Fund. Now, with the addition of the half-a-percent increase in the city’s income tax, passed by voters, that desperation ended, and as a result, Allen says it would be fiscally conservative and fiscally prudent to reserve the funds derived from the sale of property to be placed in a reserve account to meet future building needs.
“By putting it in its own fund, it’s there for the future and it’s not mixed into the general operating fund,” Allen said. “When we sold the Babcock building, before the income tax passed, we needed every penny, and now that we sold the building, I think that money should be put in a separate fund for future building.”
Allen said the Building Reserve Fund would not be a special revenue fund since it does not have a regular source of dedicated revenue. Instead, it would be a holding fund for funds that would normally be deposited in the General Fund, but instead are to be held in reserve for a dedicated purpose.
Allen reiterated there are no plans for the use of the monies, but the intent is to hold them in reserve for future use. Allen said there is no imminent plan to construct a new building, to perform remodeling of any other building.
Reach Frank Lewis at 740-353-3101, ext. 1928, or on Twitter @franklewis.