The Red Sox, A Portsmouth Welcome and A New Approach to Budgeting

Go Red Sox!

So...I was talking to a Portsmouth resident the other day about the Red Sox and I described myself as a die-hard Red Sox fan. But that isn't the whole truth. You see, once a year, my beloved Boston College Eagles fly to Florida to play an exhibition game against the Red Sox. And, for a fleeting moment, I find myself rooting for my alma mater. (Boston College, Class of 1978). Not to worry though, since my Eagles lost again. So for the rest of the season, I promise, I will be a die-hard Sox fan!

A Portsmouth Welcome

I can’t begin to thank so many of you who have been so kind to me since moving here several weeks ago. Every member of your Town Council has gone overboard to help and assist me in this transition as have our many town employees. And to the dozens of you who have called or stopped in to say hello and offer assistance, I say THANKS!

A New Budgetary Process

Granted, I’ve only been here for a few weeks. And I figured out I was in trouble when a town official recently told me he was described as a newcomer because he had only lived here for 40 years. Not sure what that makes me!

But I have been here long enough to have drawn some conclusions regarding the fiscal wellness of our community and also have assessed our approach to the annual budgetary process.

It is pretty obvious that for years the Portsmouth budgetary process began and ended with each department stating why they needed more tax dollars each year and then seeing what was left (if any) to do the tough, but necessary, things thereafter.

The problem is that in many communities there is rarely, if ever, anything left at the end of the day. So reserves get tapped, infrastructure is neglected and pensions and retiree health insurance commitments go unfunded.

After working for 30 years in local and state government, I know that spending more on our schools or protecting the safety of our citizens are a much easier sell than fixing a road (unless we get to the point that your car falls in one), repairing a building (unless it falls down) or even worse, simply putting money into reserves. There is little constituency for a healthy fund balance.

But instead of looking at the school, police, fire or other departmental budget
first, more and more communities are setting a new budget agenda… a new budget approach. The new process highlights our fiduciary responsibility to our citizens first by looking at our financial liabilities. That starts by reviewing our community infrastructure needs, restoration and/or maintenance of a responsible fund balance and the implementation of programs to address other financial liabilities like our pension and retiree health care obligations, etc., before we set priorities and spending by our departments.

Let’s be clear about what challenges we face (without, I hope, being called an alarmist). We presently have a $20-plus million pension liability. We have hundreds of millions of dollars of liability in roads, buildings, recreational and other facilities that we are not taking care of. And we have an unhealthy low level of reserves that puts us in financial jeopardy.

So how does this consummate newcomer know all of that? No, I am not a civil or structural engineer, a financial planner or even a CPA. But you don’t have to be. That is why this message is not radical or, to most, even surprising. I think most of you have known it for years. And the truth is that many, many communities find themselves in this same fix.

The question is how do we get out of this mess? The good news is that I have seen much worse. The bad news is that action is needed soon. Left unchecked, our mediocre bond rating won’t go up, it will go down. Our financial liabilities will increase faster than our ability to respond. And we will wake up one day in real financial trouble. It is time that we assess where we are and where we need to be and what are options are to correct this situation.

I look forward to hearing from you on this issue and always am open to your thoughts and suggestions on moving forward in Portsmouth!