Portsmouth Ends Fiscal Year with Healthy Surplus, Other Positives

PORTSMOUTH, RI—Portsmouth ended the most-recent fiscal year with a healthy surplus and strong financial performance overall, according to its annual audit.

The audit, released this week, shows that Portsmouth ended fiscal 2015 with a $314,000 surplus.

This year’s audit, prepared by the town’s auditor, Marcum LLP, also marks the first time the document has been formatted as a Comprehensive Annual Financial Report, or CAFR, paving the way for Portsmouth to become the 20th Rhode Island community to upgrade its reporting standard.

“A CAFR includes information that is not part of a normal annual audit and address issues in a more transparent manner,” Town Administrator Rich Rainer told the Town Council on Wednesday night.

New accounting methods to comply with Governmental Accounting Standards Board standards have caused major changes to how the town reports its assets and liabilities. Chiefly, millions in pension liabilities that are now being reported and have caused the town’s net position—a figure representing the difference of all assets and liabilities—to land at minus $34 million.

Portsmouth, according to the audit, has a long-term pension and benefit liability of $87 million. The pension plan is just 56 percent funded, though the town has been contributing 100 percent of its annual required contribution each year for several years, paying $2.79 million in 2014, according to the audit.

The OPEB fund, which has only recently been established to begin funding other long-term post employment benefits, had a balance of $544,427 in 2014, according to the audit and has an unfunded liability of $13 million.

While the reporting of those long-term debts paint a raw picture of the funding challenges the town faces in the coming years, they are separate from the the town’s General Fund, which covers day-to-day operations and is tied to the tax rate.

From the perspective of the general fund, the town had a year worthy of some celebration aside from the surplus. Portsmouth benefited from a bond rating upgrade to AAA status, which delivered $247,426 in savings due to lower borrowing costs.

The town also saved $275,000 with the discontinuation of the wind turbine fund thanks to a deal with Wind Energy Development to pay off lingering debts while they dismantled the broken turbine before installing a new one later this year.

Overbudgeted overtime in the public safety and public works departments “resulted unfavorably” in the budget, but numerous police retirements helped to offset that, according to the audit.

The town also saved $104,986 outsourcing Melville Pond Campground and aggressive tax collection in the current and past tax years brought $450,657 more to town coffers.

The full audit can be viewed HERE.