A report going before London city councillors next week paints a stark picture of the financial impacts the COVID-19 pandemic is projected to have on the Forest City.
As a result of additional pandemic-related costs, lost revenues, and relief measures to help struggling Londoners, city staff are projecting a potential hit of up to $33 million to the city’s budget by the end of August if things remain the way they are, according to a new report released Wednesday.
Staff note the projections could vary significantly as the pandemic continues, and don’t include potential budgetary impacts that could come from a prolonged pandemic or economic recession, such as property tax write-offs, and delayed or potentially lost construction-related revenue.
According to the report, the city is projected to take a $12 million hit alone through the London Transit Commission by the end of August as a result of lost fare revenue, as well as costs related to increased bus cleaning.
Other major financial impacts listed in the report include:
- Reduced investment income due to the Bank of Canada’s interest rate reduction ($3.1M);
- Lost water and wastewater revenues due to lower water consumption, and the deferral of a 3.5 per cent wastewater rate increase ($2.8);
- Additional policing costs to cover overtime, personal protective equipment, and new technology to support remote work ($2.6M);
- Lost gaming revenues from the closure of Western Fair ($2.6M);
- Reduced parking-related revenues ($2.6M); and
- Lost revenue from the city’s hotel tax ($1.7M).
“Based on the magnitude of the financial impacts known at this time, it is anticipated that a budget deficit will occur in 2020,” states the financial update from City Manager Lynne Livingstone and City Treasurer Anna Lisa Barbon.
The Municipal Act bars municipalities from running operating budget deficits and issuing debt, so any unfunded deficit from this year will have to be carried over to next year’s budget to be funded, the pair write.
In a bid to reduce the impact to the 2020 budget, the report proposes the city rein in spending this year on discretionary items, like training and new office equipment. A similar recommendation is made to all agencies, boards, and commissions who receive funding through the city.
[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]
The report’s recommendations to soften the financial blow also include transferring $3.2 million from the 2019 budget surplus into the city’s contingency reserve, and delaying some of the city’s planned capital projects beyond 2020.
“Normally we would allocate assessment growth. We’re looking to hold that back to potentially fund, on a one-time basis, additional costs this year, noting that we would still continue to allocate for urgent, essential projects that need to go forward. And this is done on a business case basis.”
Staff are recommending any longer-term measures to mitigate the pandemic’s effects beyond 2020 be addressed during next year’s budget update process, the report says.
Questions about COVID-19? Here are some things you need to know:
Health officials caution against all international travel. Returning travellers are legally obligated to self-isolate for 14 days, beginning March 26, in case they develop symptoms and to prevent spreading the virus to others. Some provinces and territories have also implemented additional recommendations or enforcement measures to ensure those returning to the area self-isolate.
Symptoms can include fever, cough and difficulty breathing — very similar to a cold or flu. Some people can develop a more severe illness. People most at risk of this include older adults and people with severe chronic medical conditions like heart, lung or kidney disease. If you develop symptoms, contact public health authorities.
To prevent the virus from spreading, experts recommend frequent handwashing and coughing into your sleeve. They also recommend minimizing contact with others, staying home as much as possible and maintaining a distance of two metres from other people if you go out.
For full COVID-19 coverage from Global News, click here.
Source: Read Full Article