UPDATE | Mayor finally speaks to WSAZ about user fees

By  | 

HUNTINGTON, W.Va. (WSAZ) -- UPDATE 5/13/19 @ 10:32 p.m.
Mayor Steve Williams spoke for the first time to WSAZ about the city's user fees since we started asking questions more than a month ago.

The user fee is the $5 a week taken from all paychecks if you work in city limits, no matter where you live.

The mayor told us Monday night officials are now better tracking how the money is spent.

Our story two weeks ago motivated a presentation before the city finance committee Monday night, but other officials still refuse to talk about what we found.

"I don't doubt for a moment that we've done exactly what we said we're going to do and are expected to do," said Mayor Steve Williams.

Our original WSAZ investigation found three problems.

First, one current and one former city council member both remember a promise that increasing the user fee from $3 to $5 in 2015 would allow the city to hire 20 extra police officers, but Huntington has fewer now budgeted than before the increase.

"No, that was a wish list," said Williams.

As he recalls it, road construction and repair projects were the biggest motivator, pointing out that funding has increased from $1.2 million in 2015 to $2.6 million last year.

Our second problem was total expenditures.

While the user fee took in $3.1 million more in the last fiscal year than 2015, Huntington only spent an additional $1.9 million on police and street construction.

Williams said the expenses from 2015, which is the last year before the increase, should not be seen as a baseline. Instead, taxpayers should trust the mayor and council to assess current needs and spend money appropriately.

"I don't see anything as a baseline or as an indicator of what's going forward or backward. We look at every year as we have it."

Our third problem was the wording of the ordinance which states user fee revenues shall go into a separate account, backed up from an interview with attorney Troy Giatras who is experienced in city matters.

Williams and finance officials told the council Monday it was set up like this 17 years ago, and annual audits every year since look at the accounts and have never found a problem.

"I stand by every penny that we've spent," said Williams.

Within 48 hours of our initial report on April 30, the city went on a public relations campaign doing damage control.

Williams said Monday night user fee expenditures were more closely tracked in the past, and it is going back to that way effective immediately.

"Somewhere along the way, it fell through the cracks. I don't know when or how," said Williams.

As we pressed if they were going to begin tracking expenditures directly, he replied, "We've already started."

Council members Mark Bates and Joyce Clark are the only two people who voted for the increase in 2015 and are still on council. They told us weeks ago they would talk to us after the city's report at the finance committee meeting Monday night, but because of our reporting, they both refused.

While Mayor Williams said the user fee increase from 2015 should not be seen as a baseline for spending, it’s about to happen for the first time.

The 2019 fiscal year ends in about seven weeks on June 30. As currently budgeted, the combined police and street construction budget is $17.5 million. It’s the first time that number is expected to be greater than the total from the 2015 budget, plus the additional amount from the user fee revenue since the increase.

This year’s total user fee revenue is budgeted for $8.2 million, which is 47% of the $17.5 million combined figure.

UPDATE 5/3/19 @ 5:50 p.m.
Less than 48 hours after our investigation into the city of Huntington's user fee, the city is doing damage control and on an active public relations campaign.

But they're still refusing to talk to us about it.

As we told you Tuesday night, the user fee is the $5 a week taken from every person who works inside the city limits, even if they live somewhere else like Ohio or Kentucky.

In 2015, the mayor promised the latest fee increase wouldn't be used to balance the budget. Some City Council members said the extra money would add 20 police officers.

But as our investigation found, we actually have fewer budgeted officers today than we did before the increase.

After those findings aired, the city went on a public relations campaign.

On Thursday afternoon, it released a graphic titled "Where Your Money Goes," just two days after our WSAZ investigation aired.

On Friday morning, it started putting up signs around paving and street construction projects as metal reminders all around town.

It comes after our investigation found that since the last user fee hike in October 2015, spending on police and street construction has not risen the same amount. The fee has brought in an extra $3.1 million, but there was only a spending increase of $1.9 million in fiscal year 2018 which ended June 30, 2018.

Plus, while the city ordinance calls for the user fee to go into a separate account, we found it goes into the general fund.

As experienced attorney Troy Giatras said at the time, "it appears on its face very clear, very unambiguous,” referring to the city ordinance. “It is a very small sentence. It has very few words and it has the word ‘shall’ in it."

So let's take a closer look at the user fee graphic released by the city.

A pie chart states $3.44 million goes to street construction and the rest, $4.76 million, goes to police protection.

But that's misleading.

Both in an email from city attorney Scott Damron in January 2017 and a response to our Freedom of Information Act Request in January of this year, the city makes clear, there is “no documentation concerning the direct allocation of the user fee” and “no specific accounting.”

It's all in the general fund.

So the city could have released a different pie chart that shows the user fee exclusively going to the police department and been just as accurate.

We asked again for an interview with the city or Mayor Steve Williams Friday. That request was again denied.

But city spokesman Bryan Chambers said the graphic is just a representation of how the revenue is used, but not an exact accounting of the dollars.

The post on the city's Facebook page has generated more than 100 comments.

Some are happy with it like Justin Huffman who said, "Thank you Huntington."

But Josh Ross said "Not buying it" and James Kaul said in part, "Running some damage control... hmm? Too little too late."

Christina McBride references our original report when she says "Why does Huntington have fewer Officers now, then before the user fee was raised? Why isn't the money being kept in a separate account, like other cities in WV do?"

As for the sign at 10th Street and 12th Avenue near Ritter Park, stating the paving is paid for through the city’s user fee, it went up Friday morning and witnesses say there was a truckload of them. No one will tell us when that decision was made to start putting them up.

The city's graphic uses information from fiscal year 2019 which ends in less than two months, on June 30, 2019.

As currently budgeted, it will be the first time funding for police and streets will rise at least $3.1 million from the expenses four years ago, the last year before the most recent increase.

As we told you Tuesday, the Finance Committee is scheduled to get an update on the user fee at its meeting on May 13.

The mayor and council members won't talk to us until then.

Of course, we'll be there and continue to follow this story.

West Virginia's largest cities take several dollars from every one of your paychecks to help fund police and roads. Even if you live in Kentucky or Ohio, it doesn't matter.

Huntington has the largest user fee of all at $5 a week or $260 a year, whether you make millions or minimum wage.

The last time the fee went up, some City Council members say the extra income would help fund up to 20 more police officers. But almost four years later, the city has fewer officers than it did back then.

The mayor and city officials refuse to talk with us about it.

It's a WSAZ investigation we've been working on for almost 18 months.

"This is not intended to balance the budget," said Huntington Mayor Steve Williams in 2015 as he asked council to raise the city's user fee from $3 to $5 a week.

"Nothing to do with balancing our budget,” said City Councilman Dave Ball at the time. “The only way we can get more community policing done and accomplished is to have more police officers."

The police department even presented a needs list of 20 new officers.

That PowerPoint presentation is something that current city Councilwoman Rebecca Howe still remembers.

“Yes, I was there when they showed it."

More than that, Howe said she was told it could be fully funded with the increase, bringing the police force up to 122 officers.

“That's what they told us. But I did not believe them," she said.

She was one of the two no votes. But the increase passed anyway, even over the objections of many residents who voiced disapproval.

The other no vote was Scott Caserta who said at the time, "I can't trust this administration to do with money what they say they're going to do."

Fast forward almost four years.

Our investigation found the user fee brought in $7.8 million in revenue last fiscal year, $3.1 million more than it did in fiscal year 2015, the last full year before the increase.

The city spent $13.8 million on police and street construction in 2015. Last year, the city spent $15.7 million on those two things.

If you do the math, the city increased spending on police and road constructions by $1.9 million, not the additional $3.1 million the increased fee generated.

If the city had budgeted the same amount from the general fund and added the full $3.1 million, it would have brought spending up to $16.9 million.

But again, at the time, Mayor Williams said, "this is not intended to balance the budget."

As for the number of budgeted police officers, it's gone down, from 112 in fiscal 2015 to 103 in fiscal 2018.

The fiscal year runs from July 1 of the previous year to June 30. So for fiscal 2018, that is from July 1, 2017 to June 30, 2018.

While in fiscal 2019 it went up to 108 budgeted positions, there's only 92 on the payroll with several on injured or military leave.

By not having 16 officers on payroll currently, it saves an estimated $726,000 just on salary. That figure is arrived by dividing the $4.853 million for 107 officers (not including the chief) for a $45,000 average multiplied by 16.

"Aggravated,” said Howe. “They ain't got it. They got 91. They got less right now than they had then."

City officials said the savings from fewer salaries is spent on things like overtime for current officers, equipment and vehicles. The department purchased 10 vehicles this year and plans to buy five more in the next fiscal year.

We met up with Dave Ball who is no longer on council.

"Did it cost me the election? Absolutely it did,” he said.

Ball lost in the primary less than eight months after he sponsored the ordinance to increase the use fee.

But he’s not upset about it, believing still it was the right thing to do.

His take of the list of HPD needs back then differs from Howe's and Caserta’s.

"I looked at it more as a wish list," Ball said.

His view is the City Council sets the budget. It's up to the department head, in this case the police chief, to determine where to spend it, even if the combined police and streets budget does not match the extra money the user fee brings in.

"I'm OK with it as long as they're getting accomplished the things we said we would,” Ball said. “If the chief says he can do it with fewer, that's fine too."

But even with the user fee hike, Huntington police had to lay off 11 police officers in January 2017. That's the same year the city reported a record number of homicides.

At that time, in a WSAZ investigation, Mayor Williams called the fee a firewall.

"The intent was that it was going to help us to be able to hire some additional people. That was the intent,” Williams said.

And without the user fee, the city could have seen a lot fewer numbers.

“Oh yeah, it's frightening," he said.

But Howe isn't surprised by the numbers.

"I didn't believe it then and I don't believe it now," she said.

While Caserta was not available because of a family medical issue, he stands behind what he said four years ago that, "this was a trust issue."

Our WSAZ investigation finds an additional issue.

The wording of the ordinance states the revenue from user fee shall go into a separate account. But Huntington puts it into the general fund where it only shows up as a separate line item.

"There should be no dispute," said Troy Giatras, a Charleston-based lawyer with The Giatras Law Firm.

Giatras has 30 years experience including as a city attorney who has both written and interpreted legislation. He said the city is not in compliance with its own code.

"It appears on its face very clear, very unambiguous,” Giatras said. “It is a very small sentence. It has very few words and it has the word “shall" in it."

In an email, the Huntington Finance Director said state code prevents them from keeping a separate account, but Giatras disagrees.

"I did not read anything that spoke about a special account, either setting one up or prohibiting the setting of a special account up,” he said.

In fact, we found the city of Parkersburg which has a similar fee keeps it in a separate account.

Other cities can tell you exactly where their revenue has gone. For example, Morgantown has hired 10 officers and 20 vehicles since 2014.

But our WSAZ investigation finds Huntington does no such accounting. They tell us because the expenses for the police department and street maintenance are more than revenue from the user fee, that's unnecessary.

No one from the city would agree to be interviewed for this story even after several attempts. Instead city attorney Scott Damron released a statement which says in part "it has always collected, accounted for and spent the fee revenue in accordance with local ordinances and with state law."

To read the full statement or see a partial list of street construction projects, scroll to the bottom of this story. To see a more complete list of street construction projects, click on the Related Documents to the right.

We also tried to talk to Mayor Williams at a recent neighborhood walk with the mayor, but he declined.

"We've never hidden anything from you all,” Williams said. “We've given all the information we have."

Mark Bates and Joyce Clark, the only two people still on council who voted for the increase, refused to be interviewed as well.

As for Howe, there's too much crime.

"Unsafe, this is an unsafe city at this point," she said.

Ball said Williams’ words of "this is not intended to balance the budget,” is not a promise.

“Not on your life."

But is frustrated by a commitment she believes is unfulfilled.

"Violated as a citizen because I have to pay the fees too you know."

After we called Joyce Clark a couple weeks ago, she asked the city to give a report at the next Finance Committee meeting. She and Mark Bates don’t want to talk until that happens. That is set for May 13.

The president of the local Fraternal Order of Police, Lieutenant Phil Watkins, also declined to be interviewed for this story.

There's one more issue, too.

Case law is very clear. Cities can charge fees to provide a specific service. They cannot collect taxes to get general revenue.

Giatras said, based on our findings, if the city would want to increase the user fee at some future date, it's possible it could be challenged in court because despite its name, “user fee,” it's a de facto tax.

The user fee began in Huntington in 2002 at $1 a week when David Felinton was mayor. It was doubled the next year to $2 a week and increased to $3 a week in 2009, this time under Mayor Kim Wolfe.

The user fee for Charleston is $3 a week. The last increase happened just over a year ago on Jan. 1, 2018. It’s also expected to generate $7.8 million a year.

Parkersburg stands at $2.50 a week and is used for police, fire, street and other municipal services. It’s expected to general $2.26 million this year.

Morgantown is at $3 a week and is divided between police, streets and public works.

Huntington officials list 111 individual paving projects between 2015 and 2018. There are 47 more underway in the current fiscal year totaling 6.3 miles at a cost of $1.6 million. There are all divided into each council district, including portions of Elmwood Avenue in District 8 and Jefferson Avenue in District 2.

There have also been 22 bridge repair, road slip or culvert replacement projects between 2015 and 2018 with 7 more scheduled in the current fiscal year at a cost of $2.5 million. Two of the biggest are Edgemont Road in 2017 and Hilltop Road this year which is expected to cost $1 million by itself.

The full statement from Huntington City Attorney Scott Damron:

“Since the City of Huntington implemented the User Fee in 2002, it has always collected, accounted for and spent the fee revenue in accordance with local ordinances and with state law. This can be verified by the fact that the City has never been cited for improper collection, accounting of or expenditure of the User Fee in any state audit.

“All funds collected from the User Fee are expended for police protection and street maintenance. In the 2020 budget for example, the projected revenue from the fee is $8,300,000. The projected budget for the Police Department is $14,536,758, and the projected budget for street maintenance is $2,450,000. So, for 2020, the User Fee is anticipated to contribute 48.86% of those combined costs. Therefore, every dollar of the User Fee that is collected is appropriated to the correct municipal expense.

“The use of the funds generated by the User Fee is transparent, and it can be easily identified in the revenue and expense line items of our budget. We agree that it is always incumbent upon us to promote how the public’s User Fee dollars benefit the community, but we wholeheartedly reject any assertion that we are not collecting, accounting for or expending the User Fee in accordance with local ordinances or state law. Anyone who makes this assertion isn’t familiar with the law and doesn’t understand proper accounting procedures.”