MORGANTOWN — As part of its first meeting in 2025, Morgantown City Council will consider a transfer of funds in support of the city’s self-funded insurance plan.
According to information put out by the city, council is being asked to move $3,315,040 from the city’s Financial Stabilization Fund to the general fund “to maintain benefit services.”
City Finance Director Jonathan Fergison said the city is currently using the general fund to offset rising healthcare costs.
“To cover the peak in healthcare costs this past year, we temporarily borrowed $1.45 million from the general fund,” he said, noting the requested transfer of funds would repay the borrowed amount and replenish the city’s Life and Health Fund reserves.
The Life and Health Fund supports the city’s self-funded insurance place which provides benefits to eligible employees.
“The plan’s flexibility allows the city to tailor benefits to meet the specific needs of its staff. Over time, this can lead to cost savings as the city pays only for actual healthcare claims incurred rather than paying premiums to an insurer,” the city explained in a press release. “However, self-funded insurance plans commonly experience cyclical fluctuations in healthcare costs due to claim variability, utilization trends, stop-loss insurance, etc.”
West Virginia Code 8-37-2 allows for the creation of a Fiscal Stabilization Fund to allow municipalities with a way to maintain resources to protect against sudden reductions in service levels or raising taxes and fees because of temporary revenue shortfalls, unpredicted one-time expenditures or emergency situations.
The city currently has $5,591,643.90 in its Fiscal Stabilization Fund. The transfer represents 59.3% of that amount and would leave a balance of $2,276,604.
While they seem to be in place for the same reasons – unexpected expenditures – The Fiscal Stabilization Fund is different from the contingency fund.
Morgantown Communications Director Brad Riffee explained the contingency fund is in place to ward against “unexpected costs related to emergency repairs or other unplanned expenditures that are critical to maintaining city operations.”
By code, the city can have an amount equal to 10% of its general fund in a contingency account.
“The primary goal of a contingency budget is to ensure that the city can respond promptly and effectively to unexpected events without disrupting planned services,” Riffee said.
The city currently has $545,007.45 available in its contingency line item.
