Wood County Assessor’s Office spells out how it will make up for budget shortfall
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PARKERSBURG - Wood County Assessor John Kelly told commissioners Thursday he is optimistic the office can address a projected $357,000 shortfall within this fiscal year.
"My hope is I won't have to ask you for a dime," he said.
During Thursday's County Commission meeting, Kelly and certified public accountant Brett Burns of Perry and Associates also presented findings from a recent audit to determine the reasons for the shortfall in the assessor's valuation fund by the end of the fiscal year that began July 1.
Burns said they looked at a variety of factors over the past six years, including whether the expected amount of money was coming into the office, if money may have been put into the wrong accounts and other factors. He said he believes the issues began in fiscal year 2021.
"You have a lot of bank accounts and a lot of funds," Burns said of state law requirements to spread money out across multiple banks and accounts.
The deficit is projected in the assessor's valuation
The office collected more revenue over that six-year period than what was estimated. A carryover of around $400,000 to start the next fiscal year was plugged into the subsequent fiscal year's budget over a number of years.
"Back in the day that annual surplus was consistently happening," Burns said. "I think there got to be a little bit of comfort with the budget saying, 'We are always going to have cash' and 'We are always in a good spot.'
"In (fiscal year) '22, there started to be a deficit and it has been there every year ever since."
The projected surplus dissipated over time without it being closely monitored, Burns said.
"There wasn't much awareness there," he added.
Burns said when he looked at the projected beginning cash balance and the actual cash balance, the office had more cash than what they budgeted during the first three years of this period.
"As the deficit crept up and they were no longer operating with a surplus, that cash balance went away," he said.
Prices and expenditures went up, but the budget process was not modified, Burns said.
In fiscal '21, there was $100,000 in expenditures from the fund and $185,000 to cover it. In fiscal '22, it was $113,000 in expenditures with $185,000 to cover it. In FY 23 there was around $113,000 in expenditures with $389,000 to cover it. In FY 24, there was $200,000 in expenditures with $323,000 to cover it. In FY 25, there were $447,000 in expenditures and only $27,000 to cover it.
"You get comfortable living on the surplus and not modifying expectations," Burns said. "Between FY 24-26 is where that got eroded. It just now came to light that it needed to be corrected."
Burns said he started talking with the assessor's office about the issue in fiscal year 2025, which began July 1, 2024. The office had been in a good financial position for a number of years when adjustments weren't made and they spent the available money, he said.
Burns said the best way forward at this point is to make cuts, which the Assessor's office has been doing.
"At this point, the only way I see this get solved is to cut spending," he said. "I truly believe that is the way."
Commissioner Jim Hamric asked if it can be taken care of this year or if it will take some time to fully address.
"I think with an aggressive approach you can get down to a balanced budget this year," Burns said. "I think you can cut this loss to as close to zero as possible."
Kelly said the office received a recommended reconciliation budget amendment amount from the state Property Valuation Training and Procedures Commission in October 2022. The PVC chairman said the required statements were not received from the county office in 2023 or 2024 and no budget revision was recommended for 2025 by the PVC. Kelly said the PVC has contacted and told them they will receive one for 2026 based on information provided by Wood County.
"Using the information provided by the PVC board, along with figures received from the sheriff's tax office, plus the reductions we are making to our line-item expenditures, I believe we are very close to covering the 2026 budget shortfall," Kelly said.
Kelly detailed the cuts his office has made.
They did a reduction in force by letting go of two employees whose salary and benefits totaled $145,883.43. The first round of line item budget cuts totaled $67,500. Another round is supposed to cut an additional $47,359. They are expected to have $108,961.92 in added revenue through collections for a total of $369,704.92 to make up for the shortfall.
One appraiser is searching for new employment, he said. If that individual leaves, Kelly said he plans to realign his workforce and eliminate one more position in the office to provide additional savings.
All of their reductions will become final once they receive their reconciliation recommendation from the PVC and file their adjusted budget amendments with the state in late October or early November, Kelly said.
Hamric asked if the assessor's office will be able to operate efficiently with those cuts.
"We are going to work on a very bare bones budget," Kelly replied. "We are going to hold it tight."
Burns wants to do a three-month analysis to figure out where they are compared to where they thought they were supposed to be.
"I would like to thank Brett for the work he has put in this audit," Kelly said. "He did not find what we had hoped for, but he did verify that no wrong or illegal actions have occurred.
"He has also shown the issue to be one that has developed over a number of years and it did not happen overnight, as I have stated from day one."
Brett Dunlap can be reached at bdunlap@newsandsentinel.com.