×

Parkersburg finance committee OKs budget revisions

B&O shortfall addressed in multiple ways

PARKERSBURG — A set of end-of-the-year budget revisions addressing a projected $220,000 shortfall and shoring up departmental line items were approved this week by City Council’s Finance Committee.

Budget revisions

The shortfall is largely the result of business and occupation tax revenue coming in $666,000 less than projected, Parkersburg Finance Director Eric Jiles told committee members Tuesday. That’s due in part to estimates being high because they were made with just one quarter of data after the rates were reduced two years ago and multiple payers filing amended returns resulting in the issuance of more than $200,000 in credits.

“That is an anomaly,” Jiles said.

The current fiscal year ends June 30.

An amendment to the revision passed 4-0, with Councilman Mike Reynolds absent, to add $85,000 to the previous B&O deduction of $581,000 due to the March merger of Parker Benefits Inc. with its parent company, Highmark West Virginia. But Jiles explained that Highmark agreed to make quarterly “corporate citizenship payments” over the next three years to help offset that.

“Highmark West Virginia continually strives to be a responsible corporate citizen in the communities where it operates and understands that the merger of Parker Benefits Inc. has a financial impact to the City of Parkersburg,” Highmark spokeswoman Kristy Cramlet said via email. “Given our commitment to the community and in recognition of the longstanding collaborative relationship with the city, we have committed to pay to the city certain funds to be used for public health and safety purposes.”

The amendment includes an addition of $85,000 to the contribution from other entities line item to reflect the payment.

Quarterly payments will continue over the next 12 quarters, gradually reducing to zero, Jiles said.

Part of the overall B&O decrease is offset by property and sales taxes coming in higher than projected, to the tune of $352,000, Jiles said. The third quarter of sales tax– which includes the months of December, January and February– brought in more revenue than the previous fiscal year, and the state’s administrative fee has decreased, he said.

Costs were also reduced on the expenditure side of the ledger, as the state Public Employees Insurance Agency reduced its billing for the unfunded liability of Other Post-Employment Benefits (health care costs for retirees), for which the city must account, Jiles said. As those amounts are spread throughout the budget, based on the number of full-time equivalent employees in each department, it resulted in reductions ranging from $876 in the city clerk’s office to $75,917 for police.

Jiles had no specific cause for the decrease, but said it could be related to the state’s efforts to address its own budget issues.

“Things that happen on the state level do impact us,” he said.

The capital outlay budget for the Municipal Building was reduced by $57,020 after the bid for exterior maintenance, awarded to Wilson Restoration, came in lower than expected. Another $50,000 set aside as a contingency reserve will also be drawn upon.

That was used to help balance line items that exceeded their original budget due to unforeseen circumstances, Jiles said.

No revenue was budgeted for the city’s vacant property registry, which charges $100 a month for houses that have been vacant for a year and do not meet city code. Jiles said that was “intentional because we didn’t know what it was going to look like.”

The revision includes revenue of $159,000 based on what was billed, but Jiles said 70 percent of that was estimated to be uncollectible and included as an offsetting expense. That doesn’t mean the city won’t pursue the unpaid funds, just that the budget will not reflect more revenue than officials expect to collect on time.

The revision was referred to the full council on a 4-0 vote and should appear on the agenda for its June 13 meeting.

A second revision approved 4-0 adds $10,004 to revenue in the coal severance fund, the city’s share of taxes on the extraction of coal in the state. That money will be transferred to the stabilization fund, essentially a rainy day fund for the city.

NEWSLETTER

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *

Starting at $4.62/week.

Subscribe Today