City Considers Gambling Loss

WHEELING – With a proposed budget that counts on receiving $720,000 from poker, blackjack and other table games at casinos around the state, Wheeling officials don’t like the hand they’ll be dealt if Wheeling Island Hotel-Casino-Racetrack opts to shut those games down in July.

During a work session Tuesday, Mayor Andy McKenzie warned fellow city leaders that although the $30.64 million budget they expect to approve March 19 is balanced today, it could soon be impacted by factors beyond their control, including the casino issue and the ongoing budget battle in Congress.

“We try to be fiscally responsible and we have a balanced budget … but there may need to be cuts moving forward,” McKenzie said during a budget workshop Tuesday.

Track President and General Manager Jim Simms has said Wheeling Island may stop offering table gambling if the West Virginia Legislature refuses to reconsider the $2.5 million annual fee that each of the state’s four casinos that offer the games must pay for the right to do so. Even without the fee, the casino is on pace to lose about $1 million on the games this year.

A portion of gross table gambling receipts is divided among municipalities throughout the state. Cities where table gambling licensees are located – Wheeling, Chester, Cross Lanes and Charles Town – and other municipalities in the counties where those casinos are located – Ohio, Hancock, Kanawha and Jefferson counties – receive larger shares, however.

“That number was pretty strong last year, but it is shrinking this year,” said City Manager Robert Herron.

Wheeling received $822,237 from table gambling during the 2010-11 fiscal year, and another $856,050 during fiscal 2011-12 – but Herron is only projecting receipts of $720,000 for the coming fiscal year, based on $359,746 collected as of Dec. 31, the midpoint of the current budget year.

Neither Herron nor Finance Director Michael Klug could provide a breakdown of how much revenue Wheeling receives from each individual facility. McKenzie asked Klug to gather that information so council members would have a better idea what they are facing in the coming months.

McKenzie also pointed out the $85 billion “sequester” – an automatic $85 billion in spending cuts for federal agencies that kicked in Friday due to the inability of President Barack Obama and Congress to reach agreement on deficit-reduction measures – could have an impact on the grants Wheeling receives through those agencies, from Community Development Block Grant funding to a Department of Justice grant that funds prevention resource officers in five city schools.

“In my opinion, there’s absolutely no leadership in Washington,” McKenzie said.

Although the CDBG budget is separate from the general fund, cuts to CDBG funding could force the city to use the general fund to pay for projects such as building demolition, sidewalk repair and some paving in low- to moderate-income areas of the city that typically are funded through the grant. And the city already has seen a decrease in federal funding for school resource officers from $100,000 in 2011 to $40,000 in 2012, although the Ohio County Board of Education has been making up the difference.

In addition, Herron told council he’d like the Ohio County Commission to provide an additional $100,000 toward the county 911 center, or even take over its operation entirely. Although the proposed budget accounts for that additional $100,000, Herron acknowledged the county has not yet agreed to provide those funds.

If county officials decline to do so, that would prompt another $100,000 in corresponding spending reductions for the city. The county currently contributes $500,000 each year toward the 911 center, almost two-thirds of the city’s proposed $763,657 budget for the facility.

“We are the only city that does 911 dispatch in the state of West Virginia,” Herron said.