City manager urges council to pass 2025 operating budget to meet charter deadline, says fiscal recovery plan will follow

City Manager Sam told the Portsmouth City Council on Feb. 10 that council must adopt a permanent 2025 operating budget at the council's next meeting to meet the city charter deadline and to begin the steps required to exit fiscal watch.

Sam said the council may adopt a temporary measure now but must have a permanent budget by March 1 under the charter. “What I'm asking council to do is go ahead and pass the budget at the next meeting because we have to by charter,” Sam said. He added staff will return shortly afterward with the financial recovery plan the state requires to lift fiscal watch and that the plan will cover roughly five years.

The recovery plan will include the changes the state must approve, Sam said, and once the plan is locked in the city cannot unilaterally change it without state approval while under fiscal watch. He characterized the recovery plan as the mechanism that will “get us out of fiscal watch” and said staff expects to present a plan within about a month so the council can consider it across three readings.

Council members asked clarifying questions about timing, scope and flexibility. One member asked whether the first temporary measure would lock the council in; Sam and others clarified that the immediate action meets the charter requirement but that the follow-up recovery-plan budget would be the binding document once the state signs off. Sam also said the proposed operating budget reflected expected union contract costs and a few increases in operating expenses but that the recovery-plan submission may change line items.

Council took a procedural vote earlier in the meeting on an item described as an annual advanced payment of taxes (labeled in the meeting record as Sam 25-1). Vice President Paige Lavette Mosley moved to adopt “alternative number 1.” The motion was put by voice vote and the chair called the vote in the affirmative; the record does not include a formal roll-call tally.

Why it matters: the council must meet the charter deadline to avoid gaps in authorization for spending for March 1, and the council’s acceptance of a financial recovery plan is the key step required by state oversight to end fiscal watch.

Councilmembers and staff agreed to continue discussions with City Manager Sam and to expect the financial recovery plan and revised budget proposals at upcoming meetings.