City May Help Oglebay Obtain Financing for Improvements
File Photo by Eric Ayres Trending
WHEELING -- The city of Wheeling is poised to again assist the Wheeling Park Commission with obtaining financing for continued improvements at Oglebay Park.
Representatives from the Wheeling Park Commission are expected to appear before Wheeling City Council in the coming weeks to provide details of plans for future improvements at the park. Wheeling City Manager Robert Herron recently explained the funding mechanism that would allow the city to help the commission secure as much as several million dollars.
"What they’re requesting is that the city permit a portion of our bank-qualified allocation of $10 million to be utilized by the Wheeling Park Commission," Herron said. "They are qualified under the federal guidelines and IRS code to take advantage of bank-qualified financing, but the city would have to sign off on that."
Last fall, Wheeling Park Commission President and CEO Bob Peckenpaugh and attorney Jim Gardill spoke before city leaders about plans to bring major improvements to Oglebay’s Wilson Lodge and Good Zoo. The financing approved by the city provided $12 million through a revenue bond.
Wheeling Park Commission officials at that time explained that the park cannot borrow money or incur debt, but it can pledge revenue. The park commission has partnered with the city on a number of occasions in the past to use the municipality’s bonding capacity to obtain financing for major improvement projects at park facilities.
"In the past year or so, the Wheeling Park Commission approached the city about a bond issue associated with improvements at Oglebay Park," Herron said. "Previously they have done it from time to time."
Through bank-qualified financing, communities that are considered small issuers -- which are the vast majority of communities across the country -- have a $10 million allocation per calendar year, Herron explained.
"It permits the banks to deduct from their federal income tax return 80 percent of the interest income from the bank-qualified issuance," Herron said. "So it’s lucrative to the banks. It also produces about a 50-75 basis point reduction in interest, so that will be beneficial to the city issuing that debt -- or in this particular case, it is the Wheeling Park Commission."
The city of Wheeling has taken advantage of this financing mechanism in the past, but Herron said there is currently no need for the city to utilize it.
"We have used our bank-qualified allocation from time to time, but I do not anticipate us using it this calendar year because I don’t anticipate any additional debt being issued by the city of Wheeling," he said. "So I would like to make that available to the Wheeling Park Commission."
Herron added that officials from the Wheeling Park Commission are expected to appear before Wheeling City Council to outline the specific plans for this financing.
"I know they’re going to come and talk about what they want to do," Herron said. "But we do anticipate presenting ordinances to utilize that allocation at the next city council meeting for improvements at Oglebay Park, which include renovations to Wilson Lodge."