Download Budget Narrative

                                                GENERAL CONSIDERATIONS

Morgantown continues to enjoy unprecedented growth and development. The City is consistently ranked in very favorable positions reporting population growth, unemployment rates, per capital income, and just about all other measures of economic development for West Virginia Cities. Two important points to be noted though are first that growth for the sake of growth is not a good thing. Growth that supports and advances quality of life is the true objective. This translates to meaningful, safe, rewarding employment opportunities; quality public services; and high value discretionary and leisure pursuits. The second important point is that conventional wisdom dictates that this remarkable rate of growth being enjoyed by the City cannot be sustained for the long term. Inevitably it will slow.

Given the above situation and particularly with regard to the proposed budgets within this document, attention is called to the extraordinarily large numbers for an exciting array of projects proposed here within . They are very much atypical for a West Virginia City the size of Morgantown. Care and restraint must be taken that the one- time revenues supporting them not be taken for granted. In 24 to 36 months these revenues will almost certainly be diminished. With this written, some of the more important developments in the City are:

RIVER FRONT DEVELOPMENT: This past year, the Clay Street Project was completed and additional planning effected for the next phase of development. In the near term, a contract should be awarded to construct the $3,200,000 Marina and the design engineering for the West Virginia Public Theater initiated. The TIF projects should take final form (Parking Garage, Walnut Street Entrance, and other landscaping). Additional private sector activities should include ground breaking for a new, mixed- use building in the Wharf District and an additional condominium structure on University Avenue.

MOUNTAINEER GARDENS: This potentially $70,000,000 project continues to advance to provide residency for up to 1,000 students in the Downtown on University Avenue. This project should significantly relieve rental pressures on traditional neighborhoods while greatly enhancing all of the Downtown businesses, special events, and other facilities. Adjacent to the PRT, bus routes, and public parking garages, the site is very well positioned to serve the Downtown.

DOWNTOWN BUSINESS IMPROVEMENT DISTRICTS: Three Districts have now been created in the Downtown to put in place a substantial, new street scape on High Street. Approximately $1,300,000 has been assembled for the first two phases of the project to be constructed this summer. Special Note: This project is addressed later in this document under CITY COUNCIL GOALS AND OTHER HIGHLIGHTS.

METROPOLITAN THEATRE: The Theatre Foundation is currently completing a restoration project in the Theatre and is greatly assisting the City and the Theatre Commission in assembling a new round of State grant applications. This project is also further addressed in CITY COUNCIL GOALS AND OTHER HIGHLIGHTS.

SQUARE AT FALLING RUN: The project developers continue to work on design specifications for streets, utilities, buildings, and other features of this project. They are also carefully studying the feasibility of constructing a larger, private parking garage rather than the public one originally proposed. They are also considering increasing the scope of Phase I to include a major piece of mixed- use development with the garage and residential pieces.

SUNNYSIDE UP: As a product of a unique partnership of the City of Morgantown, West Virginia University, and the private sector, this organization continues to promote the redevelopment of perhaps the most notorious neighborhood in West Virginia, and the area is rapidly being changed. In the last five years, 35 buildings have been demolished; new apartment buildings have been constructed; WVU cleared an entire City block; the University is making arrangements for new student housing; and the private sector is considering developments that are measured in tens of millions of dollars. Sunnyside Up is working hard to mold and fashion all of these exciting opportunities into an upscale, high quality of life environment as per the recommendations of its redevelopment plan. This project is also further addressed in CITY COUNCIL GOALS AND HIGHLIGHTS.

WEST VIRGINIA UNIVERSITY: Over the past ten years, the University has made a substantial investment in Morgantown changing the profile of the City. This work is continuing with additional construction on its Medical Campus ($139,000,000), emplacement of a new Research and Development Park (Phase I $40,000,000), and major rehabilitation of a number of existing structures ($103,000,000). All of this is in concert with its increasing student enrollment measuring in the thousands over recent years and the near term. It has been conservatively estimated that each additional student will generate $80,000 in economic activity during a four year stay in Morgantown.

MORGANTOWN AIRPORT: A number of remarkable opportunities have converged at the Airport creating a synergy of development opportunities. Completion of the water system upgrade should be realized this summer. The runway safety area extension is ahead of schedule. The creation of a 50 acre site for the Airport Light Industrial Park is on schedule. The West Virginia National Guard has undertaken the design engineering of a new Reserve Center. The County Development Authority is working closely with the City to finance a new access road on the east side of the Airport. Plans are being assembled to construct new general aviation hangars on the east side and new corporate hangers on the west side. Overarching all of this is a brand new commercial air service to Cleveland interfacing with Continental Airlines scheduled to start later this year.

RECREATION: BOPARC continues to support and develop new facilities at an amazing rate. Progress at Dorsey’s Knob is indicative of the strong dynamic at work in the organization. Partnering with the County and the MRTC for maintenance of area trails is also illustrative of the confidence and trust that the organization has earned in the community. The coming year promises that these advances will continue. This issue is also further addressed in CITY COUNCIL GOALS AND OTHER HIGHLIGHTS.

COMMUNITY DEVELOPMENT: Although the entitlement program has been further reduced, the City is working on a number of special initiatives important to the City. Low and moderate income housing activities remain a priority. One new program already producing tangible results is the Housing Authority’s initiative to purchase existing rental properties, rehabilitate them, and then resell them to purchasers willing to maintain them for owner occupancy.

GENERAL SERVICES: All of the above helps form the base of the growth and development of Morgantown as featured in the first paragraph of these considerations. Perhaps not as readily visible though has been the growth of City government itself. Because of all the increased demands on City government, its work force has grown as well. Over the past 10 years, the City has created 15 new positions. It is important to note that all of these new jobs have been entirely funded from the growing revenues available. None of them were funded with any increases in tax rate formulas or service fee increases. The positions are: 5 Police Officers, 3 Code Enforcement Officers, 2 Fire Inspectors, 1 BOPARC laborer, 1 Assistant City Attorney, 1 Assistant Planner, 1 Beautification Specialist, and 1 Engineering Technician. This issue is also further addressed in EXPENDITURES GENERAL CONSIDERATIONS.

Morgantown is very fortunate. WVU; a dynamic private sector; cooperating governments; creative nonprofits; and engaged neighborhoods are extraordinary assets all hard at work to advance the quality of life in the larger community. In the spirit of that work, the balance of this document proposes budget documents for the City of Morgantown for FY 2006-2007.

                                                     CITY COUNCIL GOALS

                                                                AND

                                                     OTHER HIGHLIGHTS

What follows is a brief description of the proposed budget as per City Council’s goals and an overview of significant, proposed features:

1.       No Service Fee Increases or Changes in Tax Formulas: Although the City has some flexibility in raising additional revenues through these mechanisms, the proposals in this document are financed through the growth of the City’s economic base. Special Note: Later in the fiscal year, there may be an opportunity to construct a new, north side fire station and purchase additional fire equipment and vehicles. Dependent upon land acquisition costs, this initiative may be funded by a fire service fee increase of 20% to 30%. As this opportunity further develops, Council will be kept advised.

2.      Continue the Street Paving Program: This is a traditional program included in the City budget financed in the Capital Escrow Account rather than through property owner assessments or service fees. This year the program is proposed to be $400,000.

3.      Continue the Sidewalk Program: $167,477 remains available for this program without employing property owner assessments or service fees.

4.      Grant City Employees a Cost of Living Raise: Last year the Federal Consumer Price Index increased by 3.4% for this area. The proposed budget funds a 4% increase recognizing that over the past several years, City employees have assumed a greater share of the health insurance costs through incremental changes in the program. The cost of this raise is $311,183 . If approved, this will be the fourteenth year in a row that Council has granted a pay raise.

5.      Continue Capital Improvements Program: Major items recommended are:

Department                                            Item                                              Amount

Police                                                       Cruisers                                        $ 144,000

                                                                Equipment                                     25,000

Fire                                                          Equipment 20,000

Public Works                                           Skid Steer Loader                          35,000

                                                                1 Ton Dump Truck 42,000

Signs and Signals                                    Pick Up Truck                                25,000

Code Enforcement                                  4 Wheel Drive Vehicle                   25,000

Equipment and Maintenance                   Tools                                   16,000

City Hall                                                   Repairs 15,000

Information Technology                           Equipment                                     10,000

TOTAL                                                                                                           $357,000

Principal Capital Improvements planned for the next 4 years are as follows:

Department                       2007-2008    2008-2009    2009-2010    2010-2011 

City Hall                    $ 20,000    $ 20,000    $                   $ 

Engineering GIS                 15,000     15,000     15,000     15,000    

Police Cruisers                    150,000     150,000    150,000     150,000 

Street Resurfacing              250,000     300,000    300,000     300,000 

Sidewalk Program               100,000     100,000    100,000     100,000 

Fire Department 2,300,000

Station/Vehicles

6.      Support BOPARC: $300,448 remains in the Capital Escrow Account for Wiles Hill, Dorsey’s Knob, and special projects (includes the Land and Water Grant match). The proposed budget recommends an additional $233,500 for interest payments and acquisition of Dorsey’s Knob (retire all debt) and $300,000 to fund the Commission’s Quality of Life initiative. Total funds available for BOPARC would be $833,948.

7.      Continue Support for Sunnyside Up: To further advance this initiative and as per the agreement with West Virginia University, $100,000 is proposed for the fifth year of operation.

8.      Beautification Projects: $14,303 remains in the Capital Escrow Account. An additional $30,000 is proposed to support new projects (University Avenue median). Special Note: The full time coordinator, seasonal help, and interns are budgeted in the General Fund–City Manager’s Office.

9.      West Virginia Public Theater: The fourth $100,000 payment toward the $500,000 grant pledge is included in the Capital Escrow Account.

10.     Downtown Business Improvement Districts: $50,000 is proposed in the Capital Escrow Account to fund the third phase of the High Street Project. An additional $200,000 is proposed to cover potential budget shortfalls in the first two phases of the project.

11.     Contributions to Other Agencies: The MLK Celebration, Social Justice, Celebration of America, Community Trust, Humane Society, Vision 2020, Main Street, Arts and Culture, Mon Health, MRTC, and the United Way are proposed to be kept at current levels–$210,500. The contribution to the MAEP is suggested to be increased by $1,000 to $14,000 (helping develop the Airport Access Road) and two new programs are suggested–the Community Visions Foundation is included for $20,000 (part of the Benedum initiative) and the Clean River Program for $3,000. $15,000 is also recommended for the Botanic Gardens Project.

12.     Housing Demolition Program: Currently this program has a $23,381 deficit because of emergency projects. To balance that line and restore the program, $123,381 is proposed leaving a balance of $100,000 for the new fiscal year.

13.     Public Works Garage: As reported several years ago, a major soil restoration project continues at the Public Works garage to mitigate an old fuel leak at the site. This line item has a $30,438 deficit. To balance the line and to fund the activity for another year, the proposed budget recommends $120,438 be expended (mitigation may need to be continued for another 7 years at a rate of $90,000 per year).

14.    Metropolitan Theatre: This past year, Council pledged $1,000,000 to this project as a match for an additional $1,000,000 to be derived from fund raising. To help realize this pledge, the proposed budget suggests that $800,000 be reserved for the project. The remaining $200,000 may be budgeted as soon as funds allow.

REVENUES

GENERAL CONSIDERATIONS

1.      The cash carry over is estimated to be $751,079. This number is based upon detailed projections of this year’s revenues and expenditures. A formal budget amendment for the current year will be presented prior to the end of the fiscal year.

2.      Property tax assumptions for the new year are based upon past levels of growth and conservatively projects 5% growth for the new year. The actual expected tax should be forwarded by the County in early March.

3.      All utility taxes are held at current rates and usage factors.

4.      The most significant number in the General Fund is the B & O tax revenue. The projection for the new year is $8,120,000 reflecting a conservative growth rate of 1.5% over the current year. All parts of Morgantown’s economy are experiencing stable growth. Particular attention though will be focused on retail tax returns in the new year with the addition of another shopping center outside of the City.

5.      B & O construction revenues are estimated to be $2,000,000 based upon information provided by developers and other area interests. As in years past, it is proposed that these funds be segregated as one-time revenues and invested in capital improvements. Rates of collection will be carefully monitored and capital improvements can be slowed or accelerated as necessary as allowed by cash flow.

6.      Grant–Police Personnel continues to be decreased reflecting reduced Federal Funding levels. These grants will drop from $100,000 this year to $84,644 next year.

7.      Grant–TSA is another Federal grant that was established just this past year to pay the Police Department for security services at the Morgantown Airport. Next year the City will receive $84,476.

8.      Fire Service Fees are based upon actual charges with a 2% delinquency factor.

9.      Discounts on Fire Service Fees are negative numbers employing a more accurate accounting methodology (by not subtracting them from the revenue fees, the amount of the discounts can be specifically identified).

10.     Court fines project an increase of $28,000 over actual collections in FY 2004-2005 because of the increased activities of the Police Department and an increase in parking fines in restricted areas.

11.     Earned Interest is increased because of a stronger cash flow in the City and increasing commercial rates.

12.     Remaining revenues are projected on the basis of recent, historic trends.

                                                                EXPENSES 

                                                  GENERAL CONSIDERATIONS

l.        Personnel costs in Police, City Manager’s Office, and Code Enforcement are increased by $175,309 to fund the addition of four new positions. They are: Two new Police Officers, an Information Technology Specialist, and a Building Permit Technician.

2.      Health Insurance rates are calculated at current rates (125% of expected claims) and allow for a 10% increase in the second half of the new fiscal year. With this assumption, the City will expend $2,032,528 on this fringe benefit next year.

3.      Retirement costs for the City workforce are generally held constant with the exception of the Police and Fire Departments. As per State law, employer contributions to these programs are increased 7% per year. To fund this requirement in the new fiscal year, the cost is $51,991.

4.      All liability insurance costs are increased by 10% for a total cost of $274,660.

5.      The Utilities/Water Line for City Hall has been increased by $90,000. This reflects a PSC mandate to pay MUB for leachate entering is collection system from the City Landfill.

6.      The General Fund Contingency Line is proposed to be $567,883 which is 3% of the budget.