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Council debates raising general fund balance target; initial amendment considered and later tabled pending financial review
Summary
The Portsmouth Town Council debated raising the town’s unrestricted general fund balance target to 13%–17% of the operating budget but did not enact an ordinance change; councilors asked finance staff and advisory committees for more analysis and tabled the item.
The Portsmouth Town Council held an extended debate on a proposal to amend Chapter 65 (Unrestricted General Fund Balance) to change the town’s target from the existing 8%–16% range to a higher 13%–17% band. The change was offered as a safeguard to protect the town against budget shocks and to align with governmental accounting advice suggesting two months of reserves (about 16.7%).
A motion to consider the 13%–17% amendment initially passed on a 4–3 vote, but councilors immediately questioned the consequences of codifying a higher floor and whether the vote had been premature without follow‑up examination. Speakers in the public hearing and on the council noted Portsmouth’s strong credit rating and relatively stable revenue base, and asked whether the town could instead improve returns on existing reserve holdings through conservative municipal investment vehicles.
Tom Gribe, a resident who spoke to the council, and finance officials urged that the town ensure reserves are invested prudently (for safety and liquidity) and suggested asking the pension or investment committee to review options such as laddered U.S. Treasury instruments or a state investment pool to carry funds that remain accessible while earning higher yield. Council members agreed the mechanics — including payout rules, investment criteria, and a written plan for rebuilding the reserve if it were used — needed more review.
After further discussion, a councilor moved to table the amendment and to ask the finance staff/committees to produce a recommendation on investment vehicles, target levels and operational rules. Council members said the objective was to guard the town’s fiscal stability without unnecessarily constraining future councils or needlessly holding excessive idle cash. No final ordinance change was enacted at the meeting; members directed the town finance staff and relevant advisory committees to prepare more detailed analysis and to return the item to the council.
