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Cities see benefits from home rule programs

CHARLESTON, W.Va. -- As communities in Kanawha County and around the state prepare applications for home rule status, the Daily Mail contacted mayors of the four current home rule cities to hear of their experiences.

Among the three mayors who responded to interview requests, changes to municipal revenue streams was the single most important benefit. Property maintenance issues were also a major focus, with all three mayors reporting expanded ability to combat dilapidated property.

The pilot program was first established in 2007 and Charleston, Huntington, Wheeling and Bridgeport were the only cities that applied. All were accepted.

The program expands cities' power to govern locally, and can create legislation independent of most state laws.

In 2013, the state Legislature revised the program and opened home rule up to 16 new communities, which will be selected next year.

Here is what the mayors of Wheeling, Huntington and Charleston had to say about their cities' experiences:

 

Wheeling

The program has enabled Wheeling to compete economically with its neighbors in Ohio and Pennsylvania, and has helped the city tackle the issue of dilapidated buildings, Mayor Andy McKenzie said.

"West Virginia is one of the very few states that has very limited to no local powers," he said.

McKenzie, who has been mayor since 2008, and was in the state Senate for 12 years prior, said states where "local government gets to govern locally" are much more successful economically.

"What happens is the state of West Virginia has a one-size-fits-all philosophy," he said, adding that home rule gives municipalities more flexibility with creating policy.

Wheeling was able to reduce its number of business license classifications from 77 to three, simplifying the process for prospective business owners. It dropped other fees as well, like a fire service fee it used to have on each registered vehicle in the city. Each license is now a flat $15.

City council opted in 2009 to remove the $10 vehicle fire fee in exchange for raising the fire fee on homes by $10.

"We've reduced the amount of bureaucracy and licenses and fees," the mayor said.

The city has also "dramatically reduced" the Business and Occupation Tax and added a .5 percent sales tax, he said. Half of that money will go to the city and half will go to economic development, like renovations to the Wesbanco Arena.

Wheeling's sales tax, like the tax in Charleston, hasn't yet taken effect. McKenzie said Wheeling took the sales tax idea from Huntington, where a new tax took effect in January 2012.

For Wheeling, which is just minutes from Ohio and Pennsylvania, having a competitive tax structure enables the city to compete on a regional level. Unlike more centrally located cities, border towns aren't always on a level economic playing field with their neighbors.

"In Wheeling, if I want to, I can simply jump a bridge and go to Ohio," McKenzie said.

Yet, McKenzie said being close to those other states can benefit the city, and he thinks that the tax change will do just that.

"When you have B&O tax, 100 percent of the tax is by local businesses," he said.

But under the sales tax plan, people passing through, and doing business in, the Northern Panhandle would be paying the tax -- not local businesses themselves.

"In Wheeling, I would say about 50 percent of people paying the tax are not West Virginia residents," he said. "You've shifted the burden of the tax from West Virginians to out-of-state people. For me, I think that's a huge win."

The city has also been able to better address dilapidated structures.

Empty and vacant structures have to be registered and pay an annual fee, unless the property is repaired, sold or torn down. The objective is to get property owners to do something with their buildings besides allowing them to sit and decay.

"This enabled us to work with the homeowner or business owner," McKenzie said.

As of November 2012, Wheeling had registered 155 dilapidated properties (19 of which were demolished). The fees have generated $15,800 so far, with property owners sill owing thousands more.

Wheeling has also given on-the-spot citation powers to inspectors -- an idea taken from Charleston.

"The reason (home rule is) great is because it empowers local government and local residents," he said. "Frankly, the state just can't get it done."

In the future, McKenzie said he wants to look at pension reform.

"I think there's going to be great things that happen," he said. "The people of Wheeling have really embraced home rule."

For prospective home rule municipalities, McKenzie said he expects the 16 new slots to "be very coveted."

"They've go to come with their A-game," he said of applicant cities. "They've got to think out of the box."

 

Huntington

Like Wheeling, Huntington also has to compete economically not just with neighboring areas in West Virginia, but communities in two adjacent states.

Mayor Steve Williams said the biggest accomplishment was shuffling the city's tax structure, which included changes to the B&O tax and a new 1 percent sales tax.

The B&O tax was eliminated on manufacturing and reduced for other businesses like retail.

"It makes us much more competitive," he said.

Huntington's changes have since been tweaked and replicated in Charleston and Wheeling.

Williams took office in January 2013. Before that, he'd served as a city councilman from 2009. He was also city manager in the mid-1980s and was a state delegate from 1987 to 1994.

Williams said the tax changes, combined with other amenities in Huntington, like  professional, city-paid police and fire departments, have made the city much more attractive than in the past. He called the departments and amenities the city's "value proposition," and said the city now has better talking points when trying to attract business.

"Frankly, it's changed our conversation," he said.

"If you're going to pay a bit more, you want to make sure you're getting value."

He has recently been in talks with three different businesses looking to move into city limits. Under Huntington's older laws, he said those firms would have been looking for space in unincorporated areas or in other states.

He said the tax changes "have begun tearing down the metaphorical wall of taxation to just a speed bump."

Huntington was the first city to experiment with tax changes, but being first can also bring trial-and-error situations.

Originally, the tax changes included a conversion of the $3 city user fee into a 1 percent occupation tax on income for anyone who worked in the city. The amount would have been capped at $1,200.

"College students were paying the same amount as their professors," Williams said of the user fee.

However, lawsuits were filed against the occupation tax and while they were pending, the city decided to keep the $3 user fee and drop the occupation tax earlier this year.

Still, Williams said the tax changes are proving to be positive for the city, calling the sales tax more "robust" revenue.

According to data the city provided to the state Legislature, the city has generated more than $2 million in revenue because of the sales tax. At the same time, Huntington businesses have saved more than $2 million in B&O taxes.

"The beauty of home rule is we can now craft out ordinances to meet the immediate needs of our community," he said.

Tax changes aren't the only thing Huntington has done under home rule, though. The city has also tackled dilapidated and damaged buildings in its boundaries.

"We have cleaned up our city," Williams said.

Like Wheeling, Huntington also copied an on-the-spot citation policy from Charleston. In doing so, Williams said the city has seen drastic improvements in building owners making repairs. He said 75 percent of citations have been brought into compliance by the time the citation gets to court.

"We're not having to fine people to fix and clean up their property," he said.

When a building is damaged by fire, city law now requires insurance money to first cover the cost of tearing down the burned building before money goes to the building's owner. That particular change is now available to all cities in the state. That move has saved the city more than $165,000.

"Our town has been cleaner than it has in ages," the mayor said.

He admitted that at first, city residents were suspicious of home rule and reluctant to embrace it.

"We're able to craft ordinances to meet our individual challenges," he said. "What we need in Huntington is not necessarily what they need in Ritchie County."

For prospective communities, Williams said communities should analyze their exiting operations and find out what works and what doesn't.

"Don't overreach," he said. "It's best at first to identify what has already been working. Identify what is the most pressing problem in the city."

 

Charleston

Mayor Danny Jones said modifications to the city's revenue stream have been the most noticeable change under home rule.

"That's the biggie," he said.

Charleston has put together 12 different proposals based on its home rule authority -- three times more than Wheeling and Huntington, which have submitted four proposals to the state's home rule board (all have been approved).

In May, council members approved a measure establishing a .5 percent sales tax. The same bill also struck the B&O tax on manufacturing. Other B&O taxes still remain.

The money from the sales tax is expected to help fund renovations to the Charleston Civic Center.

Changes to the city's building code also stand out, he said.

Charleston was the first to experiment with on-the-spot citations, which allows inspectors to cite properties without going through a lengthy court process. The procedure has resulted in faster compliance, and only two of 63 citations actually reached municipal court, according to 2012 city figures.

The city also changed how it deals with state agencies. With the Department of Natural Resources, the city secured an annual blanket permit for dredge-and-fill activities in streams, instead of the city needing a permit for each project. With the Department of Environmental Protection, the city simplified its process for solid waste permits for dredge and fill loads.

In addition, the urban deer hunt was first proposed in Charleston, and has since been expanded statewide. The construction of the canopy at Haddad Riverfront Park and an expansion project at the Kroger at Ashton Place are also activities enabled by different home rule proposals.

Jones suggested prospective home rule cities keep their plans realistic.

"I wouldn't ask for the moon," he said. "I'd keep my plan narrow. I'd identify a few things and hit them hard."

 

Bridgeport

Bridgeport is the other home rule community in the state. That city's mayor, Mario Blount, did not respond to requests for comment for this story.

However, according to state data, Bridgeport has fully implemented two home rule proposals.

The first is a proposal that made the annexation process easier. It allowed the city to annex several residential and commercial properties that were receiving city services and asked the city to be annexed.

The second is a reduction in the number of business license classifications from 81 to 1 and a flat fee of $15 for that license. This proposal is similar to Wheeling's.

Contact writer Matt Murphy at Matt.Murphy@dailymail.com or 304-348-4817.


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