Huntington mayor presents flat $78 million FY26 budget, warns of shrinking federal grants and growing liabilities

Mayor Steve Farrell on Monday delivered the required budget message to Huntington City Council, proposing a largely flat fiscal year 2026 general-fund budget of about $78 million and warning that shrinking federal grants and falling tax receipts will put pressure on the city’s cash position.

Farrell said the city’s top-line revenues have fallen from a COVID-era peak and that federal grant funding that boosted recent years is likely to decline. “Our biggest revenue source comes from taxes and fees. And the slope of that line is on a downward trajectory,” Farrell said. He added that the city has about $15,000,000 in delinquent taxes and fees that reduce available cash.

The mayor framed the budget as a disciplined, priority-driven plan: full funding for police and fire, more infrastructure spending, and steps to spur economic growth. “Public safety is job number one. The second thing is infrastructure. And the third is economic growth,” he said, summarizing the administration’s priorities.

Why it matters: Farrell said Huntington faces rising costs — notably health insurance and personnel — even as revenue sources contract. He estimated roughly $250,000,000 in combined unfunded liabilities across city entities, including an actuarial shortfall of about $123,000,000 tied to pension/retirement liabilities and roughly $93,000,000 in other post-employment benefits such as health care and vacation payouts. The city also faces a projected closure cost for the Deeds Hollow landfill of about $30,000,000, for which only “a couple million” has been set aside.

Key proposals and details - FY26 top line: Farrell proposed a flat general-fund budget of about $78,000,000 (the fiscal year begins July 1). The administration will present budget hearings in the coming weeks, with hearings scheduled by council staff; Farrell said he looked forward to the March budget hearings. - Revenue outlook: The mayor’s team projects business-and-occupation (B&O) tax receipts will finish FY25 in the $15–$16 million range (down from earlier peaks) and sales tax collections have fallen from a FY24 peak near $10 million. Federal grants accounted for a large share of recent revenue spikes; the mayor said total grants are expected to be roughly $11.4 million in the near term but cautioned future federal funding is uncertain. - Reserves and resiliency: Farrell said a prudent target for an operating reserve is about $11,000,000 (roughly two months of operating expenses, per Government Finance Officers Association guidance). He estimated the city will close FY25 with an unassigned fund balance between $7,000,000 and $9,000,000, below the resiliency target. - Liabilities and enterprise funds: The Water Quality Board carries about $20,000,000 in notes and bonds; HMDA (Huntington Municipal Development Authority) has roughly $6,000,000 in notes; sanitation/trash is an enterprise fund losing about $400,000 annually and had a one-time FY21 loss of $2,600,000. The Marshall Health Network Arena is subsidized by the general fund and cost about $900,000 in the year that ended June 30, 2024. - Program adjustments: The administration proposes cutting some discretionary contributions to community organizations (from about $3.6–$3.8 million in recent years to roughly $2.7 million next year) to prioritize essential services. The mayor also proposed a $250,000 allocation in the budget for jail-related costs and flagged increased legal expenses. - Targeted initiatives: The mayor reiterated support for an Innovation District downtown and several redevelopment parcels (the Foundry, ACF lot, Highline District) and said he will emphasize a veteran-focused homeless pilot project to work toward “functional zero” veteran homelessness. - Emergency response and infrastructure: In response to recent flash flooding, Farrell announced the city has designated the extension of Ritter Boulevard as a secondary emergency-evacuation route for Enslow Park and said the city will provide public notice of that route. He stressed longer-term flood fixes require federal partners such as the U.S. Army Corps of Engineers.

Public comment and council response During the meeting’s public-comment period, residents described recent residential basement flooding and asked for clarity on responsibilities and timelines for mitigation. Ben Seay, who lives on North Boulevard West, told council his home flooded and asked “where do we go in terms of trying to understand what the next steps are, who’s responsible, and create a timeline for flooding issues in our city.” Farrell had previously acknowledged ongoing flooding problems and told council the city will seek federal partnerships for larger engineering fixes.

A speaker identifying herself as Brianna Bowen urged council to remember and continue supporting the Cabell County Public Library system as members review the budget, citing library usage statistics and the community role of the system.

Next steps and administration notes Farrell said the FY26 budget will be presented to council for consideration in the coming budget hearings and that his administration will continue to refine assumptions, particularly on health-insurance costs and grant forecasts. He described the FY26 plan as “transparent” and “forward-looking” and asked council to prioritize the essential services identified in his message.

Ending Farrell closed by saying the administration will focus on ordinary government functions done well: “We just need to do the ordinary things extraordinarily well.” He invited council and the public to the scheduled budget hearings to review the detailed budget documents and line items.