CARES Act Funds Help Wheeling Finances Remain Stable Amid Pandemic
WHEELING — Despite significant losses in revenues halfway through the fiscal year, the city of Wheeling has remained in good shape financially, thanks in large part to federal CARES Act funds.
Even without the federal CARES (Coronavirus Aid, Relief and Economic Security) Act reimbursements allocated monthly by the state of West Virginia, the city of Wheeling’s finances are still relatively solid. While expected revenue losses from pandemic-related economic impacts have sent many line items into the red, the losses are balancing out with increases in other areas thanks to surging tax revenues from construction projects, as well as increases in sales tax and property tax revenues.
But the CARES Act funding reimbursements have created a significant financial safety net that now tops $10 million between the city’s Municipal Budget Stabilization Fund and its Project Fund, to where the federal reimbursements have been transferred over the past several months.
This week, members of the Finance Committee of Council received and reviewed the December financial report.
“The financial statements reflect our six-month or half-year point in our fiscal year,” City Manager Robert Herron said. “Our general fund cash unencumbered balance was $1.2 million, which is slightly less than the same time last year.”
That general fund cash-on-hand figure is very similar to the figure for that fund during the same time at the end of December in 2019 and 2018. The big exception is that, currently, money in the city’s Budget Stabilization Fund now sits at $4,937,000.
“And that’s a direct result of the transfers from the CARES Act,” Herron said.
Halfway through the fiscal year in the city, expenditures are up because of revenue transfers from the CARES Act to both the Budget Stabilization Fund and the Project Fund, Herron noted, and the city has been in position to move forward with investing money into ongoing projects.
“But for the most part, most of the departments are at or below the 50 percent mark as far as expenditures for the fiscal year,” Herron said. “On the revenue side, again, it’s reflective of the CARES Act funds — so we’re in OK shape from a revenue perspective.”
Revenue losses that can be contributed to COVID-19 include several areas where the pandemic has significantly slowed business and severely altered traditional routines within the local economy.
The Wheeling Police Department places Prevention Resource Officers in schools, and the city typically receives reimbursement for this. Yet with school campuses closed because of COVID, this changes the level of need for PROs on site. Ohio County Schools typically reimburses the city for this, as does West Virginia Northern Community College, which receives grant money for its Prevention Resource Officer.
Overall, losses in revenue over the past six months of the pandemic have stacked up for the city.
“Casino revenue, which includes racetrack, video lottery and gaming is down about $111,000; parking revenue is down $53,000; PRO revenue with the schools being closed is down $20,000; bed tax is down $184,000; and then I-470 (J.B. Chambers I-470 Sports Complex) because it was closed, revenue is down about $30,000,” Herron said. “The good news is that B&O (Business and Occupational) tax is up, mainly because of construction.”
Herron said sales tax revenue is also up.
“We’ll know more as we get through the month of January, because obviously we collect sales tax quarterly,” he said. “Property tax revenue is up, and then we also have not had to make a budget stabilization transfer of $500,000 like we made last year.
“So, all-in-all at the midway point of the fiscal year, we’re in pretty solid condition — even from a non-COVID-related perspective. But when you add in the CARES Act funds, our Budget Stabilization Fund is in very, very good condition — almost $5 million, and our Project Fund, which is where the remaining portion of the CARES Act money has gone, is at $5.6 million going forward.”
The Finance Committee approved the December financial statement and also moved a new budget revision for 2020-21 on to city council, which approved a related resolution this week.
“The vast majority of this budget revision is reflective of the 3-percent pay raise that was discussed at the last city council meeting,” Herron explained. “In addition to that, as we receive CARES Act funds, those funds are received in the general fund as revenue, but then there’s also corresponding expenses as to where those funds are transferred to.”
The revenues and related expenses from the CARES Act money, the recently approved pay raises for city employees and miscellaneous changes in funds — included a recently received grant for the fire department — resulted in the necessary adjustments to the current fiscal year budget.