Portsmouth City Council Special Budget Meeting - March 23, 2026
Portsmouth City Council Special Budget Meeting - March 23, 2026
The City Council held a special meeting on March 23, 2026, to receive the first presentation of the proposed Fiscal Year 2027 budget from City Manager Stephen Carter and Budget Officer Trey Burke. The budget outlines investments in capital projects, public safety, education, and workforce development, with a focus on financial discipline and transparency. Seven council members were present.
Discussion Items
- Budget Overview: Total proposed general fund revenues are $360.7 million, a 6.3% increase over FY2026. However, most of the growth comes from a one-time bump in real property taxes and a fund balance draw for non-recurring expenses. Underlying revenue growth is estimated at 2.9%.
- Property Tax and Fees: The real property tax rate remains at $1.24 per $100 of assessed value. Water and sewer rates increase by 5%, and stormwater fees are adjusted to $0.75 per equivalent residential unit (ERU).
- Public Safety: The budget funds a new combined public safety facility, relocation of Craddock Fire Station, and creates a public safety director position to coordinate emergency response.
- Education: Portsmouth Public Schools will receive $89.9 million. City Manager Carter stated the school system requested $14.3 million (later reduced to $12.8 million) but the proposed allocation is $7 million, bringing the total from $87.4 million to $89.9 million. (Note: This arithmetic appears inconsistent; the stated increase may be $2.5 million or a transcription error.) He also committed to continuing negotiations with Superintendent Bracie to seek additional funds.
- City Hall Relocation and Capital Projects: The budget includes relocation of City Hall, a new K-8 school, completion of the Pace Center, and other infrastructure improvements.
- Pension and OPEB: The budget allocates $21.1 million for retiree obligations (942 participants): $10.1 million for legacy pensions, $8 million for police retirement, $2.1 million for supplemental retirement, and $1.4 million for a $1,500 per participant payment. The combined net pension liability is $63.8 million (funded status 75.4%). A $1.5 million contribution is made to the OPEB trust fund, which has reached $8.5 million since 2018.
- Debt Compliance: The city meets all three debt policies: debt-to-assessed value ratio 3.8% (limit 4%), debt service-to-revenue ratio 8.23% (limit 10%), and 10-year payout ratio 73%. Ratios are projected to decline.
- Transparency: A financial transparency dashboard will be launched for residents.
Key Outcomes
- The complete budget document is available at Portsmouth Public Libraries, the city clerk's office, and online at PortsmouthVA.gov.
- Public hearings on the budget and Capital Improvement Plan (CIP) will be held on April 14, April 28, and May 12, 2026, at 7:00 p.m. The May 12 hearing will focus exclusively on rates and fees.
- Council members were encouraged to submit questions to staff in advance of their scheduled one-on-one budget meetings.
- No votes or formal decisions were taken; the meeting was informational.
- The next work session is scheduled for March 24, 2026, at 5:00 p.m.
Meeting Transcript
Good evening, citizens of Portsmouth, or who are watching us online. Want to thank you for joining us at this special meeting today to go over our proposed budget. I want to also acknowledge our city staff and uh those who are joining us on the day. I just want to acknowledge Mr. Stephen Carter, our city manager, Attorney Derek Challenger, interim city attorney, and Miss Anita Shirai, who is our deputy city clerk. Thank you all for being here, and I will now ask that my colleagues please note your attendance electronically. Seven members of City Council are present. Thank you, Madam Clerk. I will now turn this meeting over to our city manager, Mr. Stephen Carter. Sir, you have the floor. By all means. So I can see you guys as I dress. Sir. I'm honored to present to you the first look at the budget. Um for fiscal year twenty twenty-seven. At its core, this budget is about priorities. Moving key projects forward, and supporting public safety. It continues to work on those major capital items. It continues to shape our future and sets a platform for us for years to come. Including in this is the relocation of City Hall, a new K through eight school for our public school system, a combined public safety facility, the relocation of Craddock Fire Station, and the completion of our Pace Center for our school system. It also invests in our workforce, and it supports public the Portsmouth public school system and makes targeted investments in training, in technology, and staffing so we can all perform at a higher level across the entire organization. When we talk about getting stuff done, this budget reflects that. But we're interested in execution. Again, one of the clearest examples is the City Hall relocation effort. This is not just about moving offices. It's about improving accessibility. It's about using technology more efficiently. It's about opening the door to future development on one of our most prestigious and valuable portions of property. And that is our waterfront. When we talk about financial and operational excellence, this budget continues to move us forward to a stronger and more accountable organization. That includes being better trained, having better systems, and better tools for the people that do the work every day. It also includes greater transparency for our public. We will actually launch a financial transparency dashboard so residents can more easily see how their government is using those public funds that we will collect from them. When we talk about economic growth and citywide revitalization, this budget recognizes that strong cities are built block by block and neighborhood by neighborhood. Investments in infrastructure, streets, drainage, utility systems. They're not always glamorous. But they improve our reliability, they support our redevelopment and create the conditions for private investment and long-term growth. When we talk about safe, connected, and thriving communities. This budget makes meaningful investments in our public safety and emergency response. It supports a more coordinated approach to leadership and public safety. It expands tools and technology and continues to work of service that our community needs. One of the things that we will be doing in this budget or advancing in this budget is the idea of a public safety director. That director will be in charge of all things public safety and be able to coordinate all of those entities into a cohesive functioning responsive unit. When we talk about education, workforce, and partnerships for the future. This budget reinforces our commitment to our schools. Our young people and our residents who are trying to build better opportunities for themselves and their families are all recognized in this budget. The investment in Portsmouth's public schools, the new K through eight facility, and the Pace Center are more about people than facilities. They're about opportunities and preparation and long-term success for our community. Overall, this proposed budget is grounded in discipline, aligned with cities pro the council's priorities and focused on results.
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