Budget Impact Report

about 1 month ago

April 22, 2020 - Budget Impact Report

Kathy Humphrey, the City's Corporate Services Director, presented a report to address several new issues related to the approval of the 2020–2024 Five-Year Financial Plan that have arisen since the provisional budget was approved in December 2019.

View the report here.

The provisional budget planned for an increase of $3 million after growth (2.97%). With the anticipated changes in revenue expectations due to the COVID-19 pandemic, the 2020 budget is showing a revenue shortfall in the range of $7–12 million.

The report and the recommendations addressed two key issues—protecting the City’s cash flow security and supporting the community’s residents and businesses during this difficult economic time. In order to balance the budget and reduce the tax increase, the following considerations were made by Administration:

  • deferring many of the new tax-funded items that were initially approved as part of the 2020 provisional budget and supplemental items
  • reducing various operating line items that will not be required in 2020 due to the restrictions in place as a result of the COVID-19 pandemic
  • deferring capital funding and capital projects that are not urgent or cannot be completed in 2020, including tax-funded and grant-funded (Gaming, Community Works, etc.) activities
  • using reserves to fund operations and other capital projects as needed or as assumptions change

Council authorized Administration to remove the following tax funded items from the 2020–2024 Five‑Year Financial Plan to reduce the overall tax increase for 2020:

  • Asset Management Reserve increase ($550,000)
  • one of two new RCMP municipal employee full-time equivalent (FTE) positions ($42,750)
  • new Arborist FTE position ($47,250)
  • transit expansion for September 2020 ($82,000 in 2020, $258,000 in 2021, $270,000 in 2022, and $161,000 in 2023)
  • new service agreement funding ($33,000)

With the removal of these items, the tax rate increase for 2020 is estimated to be 2.29%.

Council authorized Administration to prepare a revised 2020–2024 Five‑Year Financial Plan for Council’s consideration that reflects the assumptions that the COVID-19 pandemic will impact the City’s operations through September 2020 (Scenario 2). Council provided direction to reduce the operating expenditures, as presented in Table 3 of the report, and deferring funding for capital projects as listed in Table 6 of the report.

Council authorized Administration to defer the RCMP Battle Street Detachment Renovations and Improvements Project ($750,000 funded from General Reserve).

Council directed Administration to defer the replacement of the track at Hillside Stadium ($600,000) to 2021.

Council also authorized adoption of Revenue Anticipation Borrowing Bylaw No. 16-321, which will allow the City to short-term borrow up to $15 million to protect the City’s cash flow from a possible delay in receiving property tax and utility bill payments due to the COVID-19 pandemic.

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