Council debates ways to close $2.5M Portsmouth public‑schools gap; asks attorneys to explore city risk‑management fund

City Manager Steven Carter opened the schools portion of the July 28 work session by outlining four potential ways to address a $2.5 million gap in the Portsmouth Public Schools budget created after the state raised required salary increases: (1) ask the division to use vacancy savings, (2) use anticipated reappropriation/surplus funds, (3) leave the budget fixed and let the school division adjust, or (4) reallocate city general‑fund/CIP dollars as a one‑time solution. "I have a couple things on the agenda for this evening... The 1st 1 is a Main Street update... But after that, we'll have a discussion about Brooklyn Public School budget discussion," Carter said when introducing the item, and later he asked the council to pick one item to carry to the voting meeting.

Councilmembers debated the sustainability of one‑time fixes for what are recurring pay obligations. Councilwoman Thomas warned that vacancy savings and year‑end surplus are not reliable recurring revenue sources for salary costs: "Vacancy savings are not a revenue source that the schools could even rely on for reoccurring revenue." Several councilmembers favored a one‑time city contribution from the general fund or CIP to bridge the current year while also urging a longer‑term funding formula and more frequent joint meetings with the school board to avoid future cliffs. The council reached a consensus to have staff and the city attorney investigate whether a city‑held risk‑management fund (described in the meeting as roughly $5 million) could be released for the $2.5 million request, provided the school board agrees; Attorney Miller explained the historical mechanics and noted any release would require mutual city/school approval. "That money has just been reappropriated every year, in the city budget. And so in order to release any of the money, both the city and the schools would have to agree to the release," Miller said. The item was not finalized; a special meeting or ordinance amendment was suggested depending on the schools’ concurrence.