Parkersburg budget hearings set to begin Wednesday
PARKERSBURG — Higher police and fire pension contributions and the increased fees to pay for them helped pump the City of Parkersburg’s proposed 2018-19 budget up by about $3 million compared to the current fiscal year.
And that’s before factoring in $9.2 million freed up by a change in government accounting rules.
Mayor Tom Joyce said he wants to use that money to set the city on a more secure financial path, reworking the capital reserve fund, paying off equipment lease/purchases and reloading Parkersburg’s stablilization fund.
“If we can put some of this reappropriation money to work for the city long-term, then we should be able to mitigate shortfalls,” he said. “Shortfalls mean you’ve got to go without something or you’ve got to raise revenue.”
That’s what happened this year when council, at the advice of the administration, voted to close the existing police and fire pension plans to new hires, allowing the city to change its steadily increasing payment method. That requires more than $2 million up front in additional annual pension contributions, but as the debt is amortized those sums are expected to decrease, rather than eating up an ever-larger portion of the budget.
After draining the stabilization fund to meet that higher cost this year, council voted to double police fees — from $48 to $96 a year for residential property and $96 to $192 for commercial — and raise fire fees, based on square footage and the number of floors, by 95 percent. Those hikes account for nearly $2.4 million of the budget increase.
Some council members have previously expressed an interest in finding ways to reduce the fee increases during the budget hearings, which start Wednesday. Joyce, a former councilman, said he does not expect the budget to make it through those hearings unchanged.
“We have to provide the state with a balanced budget,” he said. “It’s not about being right with this proposed budget, it’s about getting it right and doing it right.”
In his budget message this week, Joyce urged council members to not view the $9.2 million in reappropriated funds no longer required to be set aside for potential rather than actual retiree health benefits as “a chance to make political headway or invest in large-scale projects of personal interest.”
“A reappropriation of the proposed nature is an opportunity for Parkersburg to approach and attack our needs while at the same time removing some of the uncertainty that makes fiscal planning and execution difficult not for just municipalities but also charitable and private, for-profit enterprise,” he said in the message.
Comparing this to the forward-looking move to close the existing pension funds, Joyce said the proposed appropriations are “another opportunity to move the city in a positive direction where our citizens can continue to receive the services they expect and deserve, while mitigating shortfalls in revenue.”
The budget also proposes using about $1.5 million of the reappropriation to “front-load” the city’s annual paving project. This year, city officials again plan to start the program early by “borrowing” money from reserves and repaying it from allotted funds in the upcoming fiscal year. But the reappropriated funds would allow the next paving program to start in the spring and be paid for with funds from that fiscal year, Finance Director Eric Jiles said.
After three years of a robust demolition program that saw the city and some property owners raze 52 dilapidated houses, with 15 to 17 more expected by June, the city is nearing the end of the $500,000 allotted for the initiative. While there’s money in the budget to repay the final $50,000 from a $250,000 line of credit from the West Virginia Housing Development Fund and $83,333 to start repaying a $250,000 advance from the city’s own capital reserve, there isn’t any dedicated to large-scale demolitions for 2018-19, Jiles said.
Code Director Gary Moss “said that after this wave … there’ll be very few properties that we can do in major waves,” Jiles said.
Joyce said there’s general agreement the program has been a good one, but another inventory and assessment of dilapidated property is needed before the city moves ahead with a large number of demos.
“It’s worked well once,” he said. “Why would we not do it in a similar manner?”
The budget includes no raises or additional positions.
The Sanitation Department’s budget, which is self-sustaining and requires no subsidy from the general fund, is being moved to its own separate fund. Jiles said state law requires that 90 percent of sanitation revenue must be used for sanitation needs, even if it’s part of the general fund.
Joyce said removing it all from the general fund stops the city from using about $200,000 on other expenses, allowing that money instead to be put toward future sanitation needs.
The budget does include $250,000 to start repayment of revenue bonds expected to be issued through the Municipal Building Commission to fund construction of the first of three fire stations, all built in the early 1930s.
Also in the budget is $1,550,000 for the planned splash pad and improvements at the City Park pool. Of that, $1,050,000 is already on hand, with $250,000 coming from the local Spartan Foundation. The city would contribute an additional $250,000 from the general fund and anticipates another $250,000 from private donations.
Parkersburg Budget Hearing Schedule
* 3-5 p.m.: Wednesday, March 7 — Public Works, Fire
* 3-5 p.m.: Friday, March 9 — Municipal Judge, City Attorney, City Clerk, Point Park Marketplace, Personnel, Code Administration, Municipal Building, contributions from other funds, Mayor, City Council, Finance, Engineering, Development, civil service, minor cost centers
* 6 p.m.: Monday, March 12 — callbacks, if necessary
* 7:30 p.m.: Tuesday, March 13 — public hearing on proposed budget during the regular City Council meeting
* 6 p.m.: Wednesday, March 14 — Police
* 6 p.m.: Friday, March 16 — amendments
City of Parkersburg 2018-19 Budget
* Compared to the 2017-18 budget with expenditures of $30,369,245, the proposed 2018-19 budget has expenditures of $33,396,403.
* About $2.4 million of the difference comes from increased police and fire fees to pay for higher police and fire pension costs. Another $500,000 is related to projected federal grant revenue and earmarks for grant matching funds.
* The budget includes a $9,221,832 reappropriation of funds the city had set aside for the total liability of retiree health benefits, even though the money was not payable to the state. A change in government accounting rules means those funds no longer have to be retained. Mayor Tom Joyce has proposed the following uses for that money:
* $1,730,132 to pay off the city’s existing capital lease purchases.
* $2,324,010 contribution to the capital reserve fund, which, in conjunction with the lease/purchase payoff, Joyce wants to retool to better reflect state law and make most capital purchases out of, along with maintaining an approximately $1 million fund balance in case of unexpected expenses.
* $1,501,700 to get the city out of the cycle of borrowing from reserves to start the next fiscal year’s paving project in the spring. Going forward, the city could budget money for paving in the fiscal year in which the work actually starts.
* $3,665,990 to the stabilization fund, which was zeroed out to help pay for increased police and fire pension costs. Joyce said having a sufficient stabilization reserve is needed to mitigate risk from unexpected emergencies and expenses.
* The budget documents and capital plan can be viewed online at parkersburgcity.com/pc/services-2/finance/finance-reports/