WHEELING - Personnel costs - salaries, pensions, health insurance and other benefits - will make up almost two-thirds of Wheeling's budget for the 2014-15 fiscal year.
Nearly $20.8 million of the city's $31.49 million proposed budget is tied up in Wheeling's roughly 390 employees. That's $500,000 more than the city's workforce cost taxpayers last year - and a review of City Manager Robert Herron's budget plan shows that while personnel costs are on the rise, spending on other aspects of running the city is projected to remain flat or decrease slightly in the coming year.
After getting a first look at the budget proposal this past week, council will discuss it in more detail during a workshop at 11 a.m. Tuesday, just prior to their regular meeting at noon at the City-County Building.
The proposed budget represents an increase of just $105,000 over the current year - which is telling, as Wheeling will have a full year of sales tax collections to add to its coffers for the first time. Officials expect a continued decline in gambling revenue, and Herron is proposing a number of measures to keep city finances stable - including delaying Business and Occupation Tax relief for retail businesses that had been approved last year, higher-deductible health insurance plans for city employees and raising ambulance fees.
"Generally speaking, the municipal services that have been provided to the citizens of Wheeling will remain the same ...," Herron wrote in his budget message to council. The city's financial situation is very tight, particularly in light of rising police and fire pension costs. ... In addition, revenues will be monitored very closely as there is virtually no margin for error."
B&O is Wheeling's largest source of anticipated revenue, at $8.78 million, counting expected collections from delinquent taxpayers. It's also increasing - and Herron's recommendation to delay the retail B&O reduction is indicative of his hesitancy to slash one of the city's few growing sources of funds in the face of uncertainty on a number of other fronts.
Like many other cities, Wheeling is learning it no longer can bet on revenue from legalized gambling. The city received good news when the state House of Delegates chose to exempt municipalities and counties from Gov. Earl Ray Tomblin's budget-patching plan, which called for state leaders to cut a number of annual payouts of gambling revenue.
Out-of-state competition continues to take its toll, and the city still expects to see funding from gambling sources - table gambling, racetrack video lottery and limited video lottery - decline from the $1.59 million budgeted for this year to $1.37 million in 2014-15.
And when city officials announced plans to enact the new 0.5-percent sales tax last year, they believed it would bring in about $2.4 million annually. But Herron is projecting just $1.64 million in sales tax collections during the coming fiscal year, the first full year for the tax.
Collections from the sales tax - though better than city leaders initially thought - have been slow out of the gate. The $581,000 collected between Oct. 1 and the end of January is about $152,000 off the pace predicted in the current budget.
"It is my opinion that we still don't know enough about this revenue source to significantly reduce revenue to the general fund" through the retail B&O cut, Herron told council members.
Keeping the B&O rate the same on retail businesses would preserve about $650,000 in revenue that would be lost if the cut takes effect as scheduled April 1.
Other major anticipated revenue sources include property taxes, at $3.1 million; fire service and garbage collection fees, at about $1.9 million each; hotel/motel tax, at $1.6 million; and ambulance fees, at $1.2 million. Those projections are similar to last year's for the most part - with the exception of ambulance fees, as this year's figure assumes council will enact the rate increase Herron is recommending.
Wheeling will spend $1,116 for every one of its estimated 28,213 residents this fiscal year. Per capita spending continues to increase, as the city is spending about $1,080 for every city resident for the current fiscal year.
Paying for police officers to patrol the streets and firefighters to respond to all sorts of calamities throughout the city remains by far Wheeling's biggest expense. About $15.6 million - nearly half of all the money the city expects to spend this year - will go toward public safety.
The fire department budget of $8.2 million is about $200,000 higher than last year, while the police department budget of $7.4 million is virtually identical to the current budget. But any additional spending on those departments is consumed - and then some - by an automatic 7-percent increase in contributions to the police and fire pension funds, meaning the city is actually spending slightly less on day-to-day operation of the departments.
Wheeling will pay more than $3.84 million into the pension funds during the coming fiscal year, compared to $3.59 million in the current year. To provide some idea of how quickly the required increases can mount, consider that just a little over a decade ago, in 2002, Wheeling paid less than $1.6 million combined into its police and fire pension funds.
The budgets of most departments will remain largely stagnant this year, with few significant increases or decreases. The biggest change is spending on WesBanco Arena, which will increase from $332,000 to nearly $1 million due to city sales tax revenue, half of which has been pledged for upgrades at the 37-year-old downtown venue, with the other half set to fund street paving and other infrastructure upgrades.
For the first time in several years, Wheeling no longer will be subsidizing operations at the county 911 center after turning over responsibility for the facility to the Ohio County Commission on Jan 1. This, Herron has said, will save the city about $180,000 each year.
There are no pay raises in the proposed budget, but city employees are making 2 percent more than when the current budget was approved - the result of a raise approved after the start of the fiscal year. Typically, Wheeling doesn't build employee pay raises into its budget, but waits to see how much cash it has on hand when the new budget cycle begins before increasing salaries.
Herron is set to make $112,000 this year, up from the $95,370 approved a year ago. That's because Herron had been on the short list of candidates for the city manager's job in Kalamazoo, Mich, withdrawing his name from consideration only after City Council agreed to support a $15,000 salary increase. The $112,000 salary for 2014-15 indicates he also received the 2-percent raise granted to all employees on top of that increase.
Proposed salaries of other top city officials include: City Solicitor Rosemary Humway-Warmuth, $75,949, up from $74,460 last year; Finance Director Michael Klug, Public Works Director Russell Jebbia, Fire Chief Larry Helms and Police Chief Shawn Schwertfeger, $72,828 each, up from $71,400 last year; Human Resources Director Leslie Waechter, $60,343, up from $59,160; Economic and Community Development Director Nancy Prager, at $57,284 each, up from $56,161; Assistant Economic and Community Development Director Tom Connelly, $51,537, up from $50,527; City Clerk Janice Jones, $46,672, up from $45,757; and Marketing and Community Relations Specialist Allison O'Konski Skibo, $41,805, up from $40,985.