CARES Act Funds Finished for Wheeling
WHEELING — West Virginia’s monthly allocations of municipal reimbursements through federal CARES Act funding have come to an end. Yet millions more in direct federal funding through the American Rescue Plan is expected to be on the way soon.
Since the beginning of the pandemic one year ago, the economic slowdown has impacted local governments in many ways — from losses in certain revenues to extra expenses for emergency response crews.
Through the CARES (Coronavirus Aid, Relief and Economic Security) Act passed in the spring of 2020, the state of West Virginia was awarded $1.25 billion to fund various aid packages.
About $200 million of that total was set aside specifically for local governments and municipalities affected by the COVID-19 pandemic.
The city of Wheeling has been successful in submitting monthly requests for reimbursements to the state since last March and April. On average, Wheeling’s monthly reimbursements have been in the $1 million to $1.3 million range.
Last week, Wheeling City Manager Robert Herron told members of the Finance Committee of Council that the state program that reimburses local governments with CARES Act funding has come to a close.
“The governor’s office has indicated that the local government portion of the CARES Act money has been exhausted,” Herron said.
The CARES Act program for municipalities ended Dec. 31. Requests for reimbursements through the end of December were submitted, and the final round of awards for these funds came during the first two months of 2021.
While a new federal COVID relief package was recently passed by way of the $1.9 trillion American Rescue Plan, these funds are being allocated in different ways than the CARES Act packages. The city of Wheeling is expected to receive $29.51 million in direct funding from the American Rescue Plan.
Instead of having to request allocations from the state, these funds are expected to be received directly from the federal government and distributed to areas of need by the city, giving the local governments more flexibility in their use. Herron said city officials are awaiting guidance from the U.S. Treasury on specific parameters for using those new funds.
“Once we receive direction on how this money is to be spent, city council will sit down in a work session and discuss ways these funds should be used in the city,” Herron said on Sunday.
The CARES Act allocations last year helped provide the city a significant safety net. Although city revenues in many areas were down over the past 12 months, Wheeling was able to take a conservative budgeting approach, passing budget amendments when needed and keeping expenses and revenues in check.
As a result, the city was able to funnel almost all of the monthly CARES Act distributions into either its Municipal Budget Stabilization Fund or its Project Fund.
“The Municipal Budget Stabilization fund is holding steady with almost $5 million remaining,” Herron said, indicating that the city has fully funded and put a cap on this emergency rainy day fund. Finance Committee members had agreed that with the Municipal Budget Stabilization fund carrying $5 million, the last CARES Act allocations would be directed into the Project Fund, which according to the February financial reports currently stands at about $6.7 million. A number of city contracts over the past several months have been paid through Project Fund monies.
In addition to CARES Act money, this funding pool for city projects includes oil and gas revenues and Tax Increment Financing District revenues that had been generated from the former Ohio Valley Medical Center property before the city acquired it.
“The Project Fund is very healthy at this point, as well,” Herron said.
February’s financial report showed that the city’s general fund balance was just under $2.3 million, which is in line with figures from the same time in previous years.
“The overall number is definitely skewed because of the CARES Act money,” Herron said, adding that with the city being two thirds through the current fiscal year still remains within budget. “There are revenue line items that we talked about before that can definitely be attributed to COVID-19 and a slow down in business. Retail service revenues are down. But B&O taxes are up this year, and contracting is up.
In addition to the local government allocation through the American Rescue Plan, there are eligible expenses that are also expected to be approved, but those reimbursements are not expected to be similar to the month the CARES Act reimbursements.
“It’s going to be in the $1.5 million range over a period of time, so it’s not going to be a big chunk, but nonetheless, we’re going to submit it,” Herron said. “All in all, we’re still I think in pretty solid shape financially at this point in the fiscal year considering, obviously, that we have lost some revenues as a result of COVID.”