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Unfunded WV municipal pensions near $1 billion

Quality of WV water discussed, regulations questioned

CHARLESTON, W.Va. — Unfunded municipal pension liabilities are near $1 billion and West Virginia cities are struggling because of the debt, according to Blair Taylor, executive director of the West Virginia Municipal Pensions Oversight Board.


         Taylor was one of more than a dozen leaders who spoke Monday at the West Virginia Associated Press Legislative Lookahead in Charleston.

         During a panel discussion on municipal issues, Taylor said municipal police and firefighter pensions have about $1 billion in unfunded liabilities and are “a huge burden for many West Virginia cities.”

         Charleston has a $280 million unfunded liability “which is the worst in the country,” said Charleston Mayor Danny Jones.

         When panel moderator John McCabe, managing editor of The Wheeling Intelligencer, asked what one thing the Legislature could do to help cities, Jones said, “Take ‘em all,” referring to the pension plans. “The state created them, it ought to take them,” he said.

         In addition, “I think the state should adopt complete home rule for the cities,” Jones said.

         Under freedom granted by home rule, Charleston and Wheeling are implementing sales taxes that will be used, in part, to pay pension liabilities.

         Wheeling has an $80 million liability. Wheeling Mayor Andy McKenzie said his city has had to make cuts to pay for pensions. “If we didn’t have this problem we could have done great things” like grant employee pay raises and devote more funds to water and sewer needs, he said.

         McKenzie went on to say that, “If we have one problem, it is housing.” Although the region’s booming natural gas business has attracted workers to the area, many of them are living in Ohio or Pennsylvania because few homes have been built in the Northern Panhandle in recent decades, he said.

         Economist John Deskins, director of West Virginia University’s Bureau of Business and Economic Research, said he has been struck by how regional economies vary. “Any notion of one-size-fits-all in economic development strategy is farfetched,” he said.

         Although the recession didn’t hit West Virginia as hard as it hit many other places, “employment hasn’t done well at all,” Deskins said. “From 2012 to 2013, West Virginia lost jobs and last year was flat.”

         Asked what West Virginia can learn from other states, Deskins said, “Generally speaking you don’t want to be an outlier.” West Virginia is an outlier in the degree it is ruled by state government, he said.

         When asked how the city of Charleston is doing, Jones said, “fairly well,” but not as well as 10 years ago. The city has never quite come back to the growth it experienced prior to the 2008 financial crisis.  “Plus we had the water crisis,” Jones said, referring to the January 2014 Freedom Industries chemical spill that affected the water supply of 300,000 people in the area. “That’s done damage to us that is incalculable,” he said.

         During a panel discussion on water quality, Corky DeMarco, executive director of the West Virginia Oil and Gas Association, said, “I am personally upset we tend to vilify industry for something an outlier did.” He said Freedom Industries was required to have a containment system but it was inadequate.

         Furthermore, Freedom was required to have a spill prevention plan and groundwater permits. If the state Department of Environmental Protection wasn’t going to Freedom’s site to check on the plans “they weren’t doing their job,” he said.

         Angie Rosser, executive director of the West Virginia Rivers Coalition, said the headwaters of many rivers in the state are pristine but “as you move downstream, the quality gets worse” because of sewage, acid coal mine drainage and other pollutants.

         There have been some improvements since the coalition was established 25 years ago but threats remain, Rosser said. “Industry continues to chip away at regulations that protect water quality.”

         Last year’s session of the Legislature was dominated by Senate Bill 373, which was passed in response to the Freedom Industries spill. Rosser said the coalition believes one of the bill’s strongest provisions requires water utilities to submit source water protection plans.

         DeMarco said, “I think the focus of Senate Bill 373 ought to be on the ‘zone of critical concern’ — those areas where the public water system intakes can be compromised.”

         Mayor McKenzie expressed alarm that “I could get in a boat and go right to where water comes into a water plant.” He said, “We need to be able to monitor what’s coming into the water systems.”

         During a panel discussion of the state’s Freedom of Information Act, House Speaker Tim Armstead, R-Kanawha, said he hopes the Legislature will consider a bill clarifying what documents must be provided to the public.

         “I think we need to keep in mind that in other states the default position is you get the document,” Armstead said. “The burden has to be on the agency, the public official, to show why that document isn’t a public record.”

         Don Smith, executive director of the West Virginia Press Association, said, “What we see is the burden is much more on the requestor. We’re seeing an attitude (in government) of, ‘We’ll try to turn down every request.’”

         Pat McGinley, a West Virginia University law professor who is an expert on the Freedom of Information Act, noted that lawsuits will, over time, allow the courts to refine the definitions in the law.

         The West Virginia AP Legislative Lookahead was sponsored by the West Virginia Press Association and Marshall University’s School of Journalism and Mass Communications. Charleston Newspapers hosted the event.

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