No Major Huntington Financial Snarls, But Numerous Little Gremlins That Could Bite Approved Budget

by Tony Rutherford HuntingtonNews.Net Reporter
No Major Huntington Financial Snarls, But Numerous Little Gremlins That Could Bite Approved Budget

HUNTINGTON, WV (HNN) – Patience , listening and learning appears to be occurring when members of the administration set down with members of Huntington council’s Finance Committee. However, both revenue and expenses for the city are both only a few percentage points above or below estimates, according to a December 31, 2010 unaudited line by line City of Huntington financial report.

“There are twelve different divisions running ahead of budget in the red,” chairman Steve Williams explained after the Monday Jan. 31 meeting. “We are asking that they tighten things up [now]. The concern is we are committed to maintaining our contingency fund and we have $600,000n set aside to be spent for paving. The surface looks good, but the details start to reveal some concerns.”

Williams estimated the city is about 2.5% in the red, based on the current report.

“If things are not tightened [now], once we reach May , these departments will run out of money,” adding that cash flow so limited that paving expenses could not be fronted illustrates the “tight margin.”

Mayor Wolfe told the committee that these “pre-budget session” concerns have already been “gauged” with each department head.

Williams finds that a praiseworthy accomplishment. The administration is line by line fine combing with department heads in a manner similar to the monthly finance committee report. “That tells me we are on the same page.”

The Details

The financial data shows revenues about $725,000 ahead of last year. Much of that has come, Runyon said, from “diligence on collections.” Overall the city has about a 1% increase in revenue collections, including a jump of $102,088 in city service fee, $661,122 in B &O (mostly from emphasizing past dues and vendors who sell to large non-profits), but a drop of nearly $400,000 in municipal service fees.

Runyon stressed that construction B & O revenues were in particular lacking, as the City has not had a major project to replace the already completed expansions at the hospitals and Marshall University.

As of December 31, the departments exceeding their budget ranged from 53% to 63%. Since Huntington has 26 payroll cycles, the half year mark has equaled 53.64% of payroll for the fiscal year.

To no one’s surprise, the so-called FUS items --- fuel, utilities and salt --- are all up in usage as in the words of Deron Runyon, Finance Director, the city experiences “the third winter of greater than normal snowfall.”

The need for additional salt has added to date about $90,000 in expenditures. Fuel has added about $88,000 to expenses and utilities are about $100,000 higher. The utility increases are attributed to weather related circumstances, such as a hot summer requiring more air conditioning use and record cold in December. Increased fuel costs come from street and public works expenses of clearing the city following weather events.

Huntington Public Works Director David Hagley explained a“we’re had to pay a premium for some salt.” The city has a couple hundred tons of salt ready for use for the next storm.

Police and fire overtime continued to raise committee inquiry.

Police Chief Holbrook explained that some of the OT budget usage will be reduced once certain receivables are paid to the department. HPD receives reimbursement from grants, agencies and private entities for off-duty police presence. Williams asked Holbrook If the costs include accounting for retirement contributions.

The chief agreed this was a hard to calculate item. However, he agreed to do a little research to see if other cities add this expense to the rates charged for off duty officers.

The Huntington Fire Department has used 60% of its OT budget, Runyon said. Chief T. Craig Moore was not present to provide an in depth accounting.

Runyon , though, explained that due to unfilled positions and holidays, OT ran ahead during the first half of the fiscal year. He predicted that this will “clean itself out” but deferred additional discussion until Chief Moore would be present.

Still, OT for the police department has dropped to $484,000 versus $538,271 for the last fiscal year. The OT for the fire department is running 1,077,000 compared to $984,000 last year.

Nearly all of the department budget adjustments will be made by tweaking spending within the department. “We will have to go to another division to balance the street department budget where weather extremes have added to commodity purchases but also resulted in 64% of the department’s OT being used , for weather related chores such as snow clearing.

Although the city currently has not incurred as much health insurance expense as projected, Runyon stressed these expenditures “change week for week.” He emphasized that a major life event, such as an employ suffering a heart attack, would wipe out on paper savings. He also explained that “sanitation and trash are the most dangerous jobs” and one or two accidents could bloat those line items.

Enterprise Fund: Sanitation/Trash

Williams completed the meeting by scrutinizing the Sanitation and Trash Fund which had operating expenses of about $1.6 million dollars and refuse fee revenue of about $1.5 million dollars.

Council chairman Mark Bates inquired about a report on collection of past due refuse fees, which was not available.

City attorney Scott McClure cautioned that state law prevents enterprise funds from showing a profit. Williams quickly responded, “We can be as close to a dime [of profit] as possible, rather than running a $200,000 deficit.”

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