WHEELING - As many local cities face tough decisions to keep themselves in the black, a strong year for business and occupation tax and hotel occupancy tax revenue helped Wheeling City Manager Robert Herron balance the budget without cutting services for residents.
But ever-present and ever-increasing costs such as employee health insurance and pension benefits - and looming state demands for upgrades to the city's stormwater management system - call into question how long the honeymoon will last.
After receiving copies of the proposed budget last week, council members will meet for a more in-depth discussion of Herron's $30.64 million spending plan for fiscal 2013-14 during a work session set for 11 a.m. Tuesday. This will take place immediately prior to a regular council meeting at noon in the first-floor council chamber at the City-County Building, 1500 Chapline St.
Photo by Ian Hicks
Wheeling City Manager Robert Herron discusses his budget proposal during a recent meeting.
The budget proposal is $750,000 higher than the $29.89 million budget council passed last March, but it represents about $586,000 less spending than the budget as it stands today, which includes revisions made after the city ended the previous fiscal year on June 30 with slightly more than $1 million in surplus revenue. Depending on the city's cash position at the beginning of July, Herron said council could decide to increase the budget through capital projects and pay raises, which are not included in the budget as proposed.
The previous budget year was a record-setting one for revenue in Wheeling, and officials have seen more of the same during the current cycle, but Herron said fiscal realities mandate a conservative approach to revenue projections. He's confident the current trend will continue for perhaps another two years, but he is unsure what lies ahead beyond that.
"Every year we've had a cash carryover. I do anticipate one this year, though I don't know at what level. ... Expenditure growth is catching up to revenue growth. We're seeing that particularly this fiscal year," Herron said.
The city anticipates taking in $30.44 million in revenue during 2013-14, which combined with a $200,000 budgeted surplus makes up the $30.64 million budget figure.
Wheeling's largest single source of revenue is the B&O tax, which is anticipated to generate $6.62 million for the city. Collections surged from $4.8 million to $6.5 million two years ago and have remained strong since.
Property taxes should bring in about $3 million, and hotel occupancy tax another $1.8 million. The latter is a sign of the natural gas drilling boom's impact, as it is 50 percent higher than the $1.2 million it generated three years ago.
Other major sources of anticipated revenue are the fire protection fee, at $1.96 million, garbage collection fees at $1.8 million and the utility excise tax at $1.13 million. Herron is projecting $500,000 in income from video lottery machines at Wheeling Island Hotel-Casino-Racetrack, but that money doesn't impact city operations because 100 percent of it supplements the police and fire pension funds.
Wheeling's budget represents about $1,080 in spending for each one of its 28,355 residents. Providing residents with police and fire protection continue to be the city's largest departmental expenses, at $7.96 million and $7.35 million, respectively.
Included in those budgets are a combined $3.6 million in contributions to the police and fire pension funds, about twice what Wheeling was paying into the funds a decade ago. But state law now requires municipalities whose benefit plans aren't fully funded to increase such contributions by 7 percent each year, leading to an additional $235,000 in taxpayer contributions - $119,000 for police and $116,000 for fire - over last year.
Herron is recommending a slight increase to the police department's overtime budget, as well as increased funding for training. With additional cruisers on city streets as a result of new single-officer patrols, the fuel budget will go from $150,000 to $200,000.
Overall, most department budgets will remain relatively stable. The streets and highways and Finance Department budgets appear to have dropped sharply, but that's somewhat misleading because the current year figures were inflated by appropriations from the $1 million budget surplus that weren't part of the budget when it was approved last March.
One issue that bears watching is the West Virginia Department of Environmental Protection's demand that cities pay more attention to potential pollution from stormwater runoff that enters their sewer systems.
According to Herron, the city does not plan to increase its budget for stormwater management this year, but changes could be coming during the next budget year. He said it's too early to tell what those changes will mean for Wheeling, but pointed out that some cities around the state have had to create separate stormwater utilities to deal with the mandates.
There are no raises included in the proposed budget, but salaries and benefits for Wheeling's approximately 400 employees account for almost two-thirds of the city's spending, at about $20.3 million. Three years ago, the city spent $18.8 million on personnel - but that number expressed as a percentage of the city's overall budget has dropped over that time, from 67.2 percent to 66.3.
All workers received a 2-percent pay raise in July. However, a comparison of salaries listed in the proposed budget with those in previous budgets shows some department heads received more sizable pay increases.
Herron said Fire Chief Larry Helms, Finance Director Michael Klug and Public Works Director Russell Jebbia each got additional raises to bring them in line with new Police Chief Shawn Schwertfeger's salary of $71,400. Prior to the raise, Klug's salary was $67,269 and Helms was earning $63,892. Jebbia now earns $70,480 Jebbia's compared to a previous salary of $66,427.
Schwertfeger, who began his duties in June, is earning 16.8 percent more than the $61,154 his predecessor, Robert Matheny, made during his last full year of employment with the city in 2010-11.
Herron, who has the authority under the city charter to set employee pay, said the decision to adjust those four employees' salaries was based on an assessment of their overall responsibilities, including the number of employees they supervise and the size of the budgets they oversee, compared to those of other department heads.
Salaries of other top city officials compared with what they earned three years ago include: $95,370 for Herron versus $91,539; $74,460 for City Solicitor Rosemary Humway-Warmuth, up from $71,346; $56,161 each for Economic and Community Development Director Nancy Prager and Operations Superintendent Tim Birch, versus $54,019 for each in 2010-11; $50,527 for Assistant Economic and Community Development Director Tom Connelly, up from $48,499; and $45,757 for City Clerk Janice Jones, up from $43,827.
Two employees who joined the city early last year also are receiving slightly more than their predecessors. Human Resources Director Leslie Waechter's proposed salary is $59,160, up from the $55,000 Dave Denham was earning when he left the position in October 2010, and Marketing and Community Relations Specialist Allison O'Konski will earn $40,985, a modest increase from the $40,181 Joelle Connors-Ennis earned during her last full fiscal year on the job, which was 2010-11.