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Morgantown council approves budget revision, authorizes conditional use of stabilization fund
Summary
City council approved a first budget revision for fiscal year 2026 to align the cash-basis budget with actual year-end balances, delayed capital transfers and authorized a conditional draw from the Fiscal Stabilization Fund if needed. The vote was 5-1.
Morgantown City Council on July 22 approved a budget revision to reconcile the city’s fiscal year 2026 budget with actual cash balances at the end of fiscal 2025, moving the revision on a 5-1 roll call vote.
Finance Director John Ferguson told council the revision adjusts the carryover figure the city projected when preparing the FY26 budget to actual cash on hand as of June 30, 2025. “We have a total of $2,700,000,” Ferguson said, referring to the actual carryover; the council had budgeted an estimated $3,200,000.
The measure includes several steps to address that shortfall: delaying the FY25 year-end capital escrow contribution that had been budgeted for $2,200,000; partially delaying a FY26 capital escrow contribution ($750,000); reducing the general fund contingency; and increasing the conservative estimate of Business & Occupation major construction tax revenue for a WVU Medicine project from 25% to 30% of the projected first-year receipts. Ferguson also described the conditional use of the Fiscal Stabilization Fund as a last-resort balancing tool.
“The conditional use of the Financial Stabilization Fund . . . is to be used only if absolutely necessary,” Ferguson said. Council clarified the revision authorizes a contingent transfer of up to $2,000,000 from the Fiscal Stabilization Fund if required; Ferguson said the stabilization fund’s balance is about $3,400,000 and that using the authorized amount would leave roughly $1,400,000.
Councilors pressed staff on alternatives. Councilor Gansz asked whether spending cuts had been considered; Ferguson and staff said the FY26 budget already reflected tight, “lean” allocations and that discretionary trimming would produce limited savings. Councilor Mark Downs expressed concern about approving reductions to contingency and said he did not support the revision; Downs cast the lone no vote in the roll call.
Ferguson said the revision corrects an inconsistency in prior carryover calculations that had used a modified-accrual approach while the city’s adopted budget is prepared on a cash basis. He also reported key revenue realizations for FY25: municipal service fee receipts were realized at about 95.1% of the $4.2 million budget, and major B&O construction tax collections totaled about $1,339,000 (about 89.3% of the $1.5 million estimate), funds that historically move into the city’s capital escrow account.
City Manager Jamie Miller and other staff told council they have begun internal discussions about expense reductions and will monitor early FY26 receipts before tapping the stabilization fund. The council vote approving the budget revision was: Jody Hollingshead, Yes; Weezie Michael, Yes; Jenny Celine, Yes; Mark Downs, No; Deputy Mayor Butcher, Yes; Mayor Danielle Trumbull, Yes.
The ordinance and related transfers require staff to follow up on timing and accounting entries; Ferguson said the delay in one transfer would be measured in weeks and would not imperil capital projects or the capital escrow fund.
The council passed the revision at first consideration; the action completed the agenda item and will be reflected in the city’s budget records and follow-up reporting to the state.
