Wheeling’s CDBG Status Could Be in Jeopardy

WHEELING – Wheeling could lose about $1 million in annual federal funding if Congress approves changes to the Community Development Block Grant program included in President Barack Obama’s budget proposal.

Those changes wouldn’t affect Wheeling’s status as an entitlement city under the program this year, but their impact could be felt by mid-2014, according to Nancy Prager, the city’s Economic and Community Development director. If the CDBG money goes away, the city would have less to spend each year on projects such as street paving, demolishing dilapidated buildings and directed police patrols in problem areas.

“It’s of great concern to us right now,” City Manager Robert Herron said of the president’s proposal.

The Department of Housing and Urban Development, which administers the CDBG program, defines entitlement communities as cities with populations of at least 50,000, or principal cities in metropolitan statistical areas. Wheeling was an entitlement community when that requirement took effect, however, and has been grandfathered into the program despite having a population of just 28,355.

But the proposed budget would eliminate the grandfathering provision, and Prager said the city hasn’t received clarification yet on whether it is considered the principal city in a metropolitan area.

If Wheeling is cut out of the entitlement program, it would be forced into the competitive Small Cities Block Grant Program administered by the state Development Office – which Prager said would almost certainly mean less money with no guarantee of receiving funding at all. Entitlement communities receive about 70 percent of CDBG funds each year, while the state-administered programs receive just 30 percent.

“The Administration recognizes that CDBG funds represent a significant expenditure that is not optimally targeted based on community need or used most effectively in many cases,” page 557 of Obama’s 1,381-page budget appendix states. “The Budget includes several proposals to better target funds based on community need and ensure that communities receive grants large enough to be more effective in advancing the goals of the program.”

But Wheeling officials have a different take on the proposed changes.

“This is clearly an effort to shift funds from rural, smaller communities to larger communities,” Herron said.

During Tuesday’s City Council meeting, Vice Mayor Eugene Fahey urged residents to contact the area’s congressional delegation and oppose the proposed changes so the city “will not be forced to make cuts that we do not want to make.”

Wheeling relies heavily on CDBG funds for street paving and other infrastructure improvements, as it typically does not budget for such projects on a yearly basis. Only if a surplus exists at the end of the fiscal year does City Council allocate some of that extra money for capital projects.

City Council is expected to approve a tentative plan for $1.12 million in CDBG money for the 2013-14 fiscal year at its May 7 meeting. The spending plan is based on what the city received for the current fiscal year, but it may have to be amended after Wheeling learns its official entitlement amount. Officials have been told to expect a cut of 5 percent to 8 percent, according to Herron.