CHESTER-Continuing uncertainty over the future of casino and video gaming in Hancock County cast a shadow over Monday's budget meeting of Chester City Council.
Council members gave tentative approval to a 2014-2015 budget of $747,349, although they did not vote. City Clerk Sandra Parkins must submit the budget to the West Virginia State Auditor's Office by March 31, so council likely will not vote on it until the April 7 regular meeting.
Mayor Ken Morris said the new budget is smaller than the current fiscal year's budget by about $53,000. "We're not getting the income we used to," he said. "Video lottery was down. Municipal fees were down. Coal severance went down," he said.
All three are sources of revenue for West Virginia's northernmost city, although the biggest revenue streams are property taxes, the business and occupation tax, business license fees and gambling.
The business and occupation tax is paid as a percentage of gross income on a quarterly basis. The business license fee is paid once a year. The city's municipal fee, paid annually by all households, is $45.
Revenue from gambling in West Virginia comes from three main sources: table gaming at the state's racetrack casinos, slot machines at the casinos, and limited video lottery.
Two percent of the revenue from limited video lottery cafes goes directly from the West Virginia Lottery to counties and cities. Chester has 21 such cafes, which house 116 video lottery machines.
Two percent of the revenue from the slot machines at Mountaineer Casino, Racetrack & Resort goes to Hancock County commissioners, who then share those profits with the county's three cities-Chester, New Cumberland, Weirton-based on their population.
Chester's current annual allotment from casino slot machines is $140,000 a year. "It goes into the budget, but we don't allocate it for anything special," Morris said.
For the coming fiscal year, $53,578 is budgeted from table gaming and $35,295 is budgeted from video lottery cafes.
The fact that gaming revenue has dropped over the last few years, partly because of competition from surrounding states that have legalized gambling, has proved worrisome for Chester officials.
"We all knew some day that it was going to happen," Morris told council on Monday. "It's just a matter of time-not 'if,' but 'when.' "
As a city, Chester tries to live frugally despite the rising cost of everything from insurance to fuel, Morris said. "We try to watch what we spend," he said. "We've got to tighten some place-I just don't know where."
Chester's budget covers operations for the street department, the police department and the building department (Chester Municipal Building). The Chester Water and Sewer Department has its own budget and a separate budgeting process.
The biggest portion of the city's budget is payroll and health insurance for the city's five police officers, including Chief Ken Thorn.
"What kills us and every city is pensions, insurance and payroll," Morris said. "Insurance keeps going up and up."
Chester pays 100 percent of the health insurance premiums for its employees. It also pays the vehicle insurance premium for Chester Volunteer Fire Department, which is budgeted at $30,000 for the new fiscal year, Morris said.
The 2014 fiscal year ends on June 30, and the new fiscal year begins on July 1.
As part of its budget deliberations, council also is planning to discuss raises for city employees, city council members, the mayor and the city clerk.
Parkins prepared two cost estimates for council-one based on a $100-a-month raise for city employees and a 50-cents-an-hour raise for city janitors, and the other based on an $80-a-month raise for employees and a 40-cents-an-hour raise for janitors.
Council expects to take up the issue of raises at the April 7 meeting.