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FY 2007-08 BUDGET |
| February 20, 2007 Hon. Mayor and Members of Wheeling City Council: It is my pleasure to present to the Mayor and City Council the proposed Fiscal Year 2007-08 General Fund and Coal Severance Budget for your review. As proposed, the budget is balanced utilizing a portion of the City's cash carryover. This year's proposed budget also maintains a Budget Stabilization Fund at $1,000,000.00. As is the case with sound budgeting philosophy, this budget is based on conservative revenue projections versus reasonable expectations for expenditures although again this year we have focused on as accurate revenue projections as possible. Generally speaking, the municipal services that have been provided to the citizens of Wheeling will remain the same although because a very tight conditions the Budget as proposed does not include capital projects or many equipment purchases. It is important to note that we will continue to work hard to insure that the most efficient and effective services possible are being offered to the community and continually strive to improve our service delivery. The proposed budget includes a proposed increase in residential Fire Service Fees of $10 per year and an additional $3 per month for sanitation services. These are two proposals to increase revenue by $450,000. The City of Wheeling, from a budget standpoint, finds itself in the similar situation to many cities through the country in that we have been able to keep our nose above water financially. Some cities unfortunately cannot make that same claim. As a result we are in position to logically look at our budgeted and future needs and direction of our organization. The City's financial situation is very tight as spending levels in nearly every non-employee related area have either remained the same or reduced to insure that we do our part in a competitive environment. We will always closely monitor expenditures to insure that, although budgeted, each expenditure is necessary and is in the best interest of delivering municipal services to our community. Also, the Administration will continue to provide financial options to Council to enable the City to accomplish goals that come up throughout the upcoming year. In addition, revenues will be monitored very closely as there is virtually no margin for error. I have enclosed the Department Head's Budget submittal as I received them. Council can compare the proposed budget against the Department Head request to remain informed as to each Department's needs and to gauge the various cuts that have been made to balance the budget. Also included are budget discussion points for 2007-08 which briefly highlight various areas of the budget for further discussion. Finally, I would like to thank the Department Heads and Mike Klug and Rita Coyne for their efforts in putting together this proposed budget. Their serious approach to the budget process helps ensure that the best possible information is put forth. Sincerely, Robert Herron City Manager
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DISCUSSION POINTS |
| A) PROJECTED CASH CARRYOVER - Although it is still early, the projected Carryover will be at least at Fiscal Year 2006-07 levels. This year's budget has included utilizing approximately $600,000 from the FY 2005-06 Carryover. This proposed budget is balanced with the help of an estimated $542,000 unencumbered carryover. It is important to remember that this financial scenario exists with very few capital expenditures, bare bones material/supplies, equipment line items. The mandated 7% annual increase in the Police and Fire Pension Funds equals approximately $156,000. In addition, the expected employee benefit increase of 8% is expected to cost an additional $145,809 to the General Fund. We have no control over the pension increase and very little control over insurance issues, which automatically puts us behind by $301,309. |
| B) PROJECT REVENUE INCREASES - The following proposals are included in the projected revenues: 1) Increase the monthly charge for garbage pick-up from $10 per month to $13 per month. The increase would generate any estimated additional $330,000 in revenue to the General Fund. PSC regulations dictate that revenue can exceed expenditures by 15%. Currently, costs represent 91% of the current revenue. The proposed change would be just over 85%. For FY 2006-07, Moundsville charged $12.00 per month plus a $5 municipal fee, McMechan charged $15.00 per month, Glendale charged $16.50 per month, and Benwood charged $11.00 per month. 2) The proposed budget includes an increase to the residential Fire Service Fee to $85 per year, up from $75 per year. This would generate an additional $110,000 per year. Currently, the Fire Service Fee generates $2,120,000 or 31.5% of the Fire Department's budget. In 1992, the Fire Service Fee covered 61% of the Fire Department's budget. The last increase in the Fire Service Fee was in 1994. The proposed increase of $10 per year would provide revenue to continue to cover 31.5% of the Fire Department's budget. |
| C) EMPLOYEE HEALTH INSURANCE - Health insurance premiums for City employees are increasing by an estimated 8% for next year for the same coverage as is currently available to employees and their families. As has been the policy of the City for the past three years, the monthly cost of the premiums is distributed at 80% for the City and 20% for the employee. The additional cost to the City is estimated at $223,883 for Fiscal Year 2007-08, while the total budget for employee insurance is $3,023,437. The General Fund portion of this cost is $2,292,280. |
| D) EMPLOYEE WAGES - The City of Wheeling has dedicated and hard-working employees. The vast majority of local government services are provided by people and I believe our people are second to none, which makes it difficult to not include a wage increase in this year's budget. The number of full-time positions included in the proposed FY 2007-08 budget is the same as FY 2006-07, although I have directed the Human Resource Department and Department Heads to review each vacancy thoroughly. This proposed budget includes a proposed 3% wage increase for City employees. Currently, the cost of a 3% increase in the General Fund is approximately $320,000. |
| E) PENSION FUNDS - The Municipal Employee Pension Fund continues to maintain a surplus of over $4,000,000 and as a result there is not a budgeted contribution to this fund. The Police and Fire Pension Funds are under funded. The proposed budget includes the following contributions to each fund with the Supplemental (Video Lottery) revenue being budgeted at $1,000,000: 1) Police Pension - General Fund FY 2007-08 contribution of $1,212,076 with $500,000 Supplemental for a total of $1,132,780. 2) Fire Pension - General Fund FY 2007-08 contribution of $1,180,249 with $500,000 Supplemental for a total of $1,103,037. |
| F) CAPITAL PURCHASES - 1) Parking Meters $15,000; 2) Five Police Cruisers - Lease/Purchase; 3) 1 Pick-up Truck-Sanitation - $24,000. |
| G) BED TAX - The City's share of the Bed Tax is estimated at $500,000. $236,000 is budgeted for the Municipal Auditorium Board and the remainder for the Recreation Department. $500,000 is passed on to the Wheeling Area Convention and Visitor's Bureau. |
| H) MUNICIPAL BUDGET STABILIZATION FUND - The Municipal Budget Stabilization Fund is proposed within the budget to remain at $1,000,000. |