By JOSEPHINE MENDEZ
HUNTINGTON, W.Va. — Several Cabell County legislators are sponsoring a bill that could help cities around the state potentially avoid financial crises.
House Bill 2549, introduced Monday, aims to change how municipalities deal with increases to their pension contributions for police officers and firefighters.
In the event of an increase, the bill states that cities shall be notified no later than Jan. 1 and the increase would not go into effect until the following fiscal year begins on July 1.
These unexpected costs, paired with increases to health insurance payouts and overspending in the police and fire departments, contributed to the city’s nearly $5 million deficit. That deficit has since been dwindled down to zero following a total of 24 layoffs in the police and fire departments, the shuffling of funds from other departments and the use of the Rainy Day Fund, which went from about $1.2 million to just over $70,000.
The increases in the city’s annual contributions to the pension plans were due to findings in an actuarial study performed last summer that showed people were living longer and that the cities were not accruing as much interest on their investments.
“I don’t think that it’s fair to notify a city (about a rate increase) after they have already started their fiscal year and then have this higher rate in effect for the second half of the fiscal year,” said Delegate Matt Rohrbach, R-Cabell, the lead sponsor on this bill.
Huntington Mayor Steve Williams said his principal concern with pensions and all other expenses is the ability to have predictability in the city’s costs.
“When we are advised in the middle of a fiscal year that we have to significantly increase an appropriation, we have no ability or time to plan for that appropriation,” he said. “The purpose of the bill that Delegate Rohrbach is introducing is to help us to have time to plan our budget and to have predictability of costs in the midst of a fiscal year. … This would give the governing body an opportunity to be able to plan appropriately, budget accordingly and implement on a fiscal-year basis.”
While Williams and Rohrbach say they see no negative ramifications of the proposed bill, representatives with the West Virginia Municipal Pensions Oversight Board feel that deferring the increase to the following fiscal year would cause future payments to be higher because they would be required over a lower number of years.
Taylor said Huntington’s plans must be fully funded by 2050.
He added that state code already has a built-in buffer that allows municipalities to take until February of the following fiscal year to pay their yearly contributions and still receive matching funds from the state in their entirety.
As it stands now, Huntington is five months behind on the pension payments, according to city Communications Director Bryan Chambers.
The bill was referred to the Committee on Pension and Retirement and then to the Finance Committee.
If the bill is adopted, Rohrbach said he will attempt to make its effects retroactive in order to assist with Huntington’s current fiscal challenges.
See more from The Herald-Dispatch