At a special Council meeting on Thursday, Interim CAO /Treasurer Ian Davey presented his report on the Status of the Town’s Finances as impacted by the Covid-19 crisis. It was not intended to be an exercise to revise the budget – the budget is unchanged – but instead was a report on what steps staff are taking to avoid a deficit. However, some Councillors saw it as an opportunity to give direction to staff on what should NOT be spent given the shortfall in revenue of $1,561,000. The charge was led by Deputy Mayor Suzanne Séguin and Councillor Emily Chorley but the remaining Councillors outvoted most of their proposals. Ian Davey repeatedly said that the budget was approved and would not be changed although spending would be reduced. Ian’s report showed a projected surplus of $75K which would be used as a contingency. He saw the meeting as the first in a series with the next meeting in probably two months.
Note that Ian has made it clear that although it is illegal for Municipalities to budget a deficit, since it’s impossible to 100% predict actual revenue and expenditures, an actual deficit or surplus is allowed.
The report calculates the projected shortfall and costs savings based on the fact that the first three months were normal and a prediction that the final three months of 2020 would also be normal. Therefore, many revenue and expenditure numbers are projected to be 50% of budget (see ian’s report in Links below for details). This is what’s currently expected – the next meeting (probably in 2 months) may present a different picture.
Data was presented in seven Schedules (A to G) below.
But first, Ian’s report included a statement on personnel redeployment:
In addition to the measures outlined in the attached schedules, in recent weeks steps have been taken to maximize the use of our existing human resources by redeploying some of our existing staff who by the nature of their work are not able to work full time from home. This redeployment can be summarized as follows:
- 8 members of the Community Services Division as follows – 4 to Parks, 2 to Marina and 2 to Public Works
- 1 member of Public Works to Marina
- 2 members of Building & Planning to By-law enforcement 1 member of Finance to Parks
- 1 member of Finance to Emergency Management (50%)
|A||Impact On Revenue||1,561,000|
|B||Impact On Operating Expenditures||-769,000|
|C||Reduced Spending Conferences||-53,425|
|E||Reduced Transfer To Vehicle Reserve||-261,805|
|F||Health & Safety – Facility Improvements||100,000|
|G||Health & Safety – Enhanced Cleaning & PPE||100,000|
Details are in Ian’s report in the Link below.
Councillors then reviewed these one by one.
Questions by Councillors
Q. Emily Chorley: Have we considered a possible increase in delinquency?
A. Ian Davey: No. A majority of Taxpayers are taking steps to be current; cash flow is not a concern; current cash flow is better than this time last year by $2M.
Q. Emily: Could we lose grants from the Province or Federal Govt – e.g. the gas tax?
A. Ian: Very little of these grants go to discretionary costs, they are mostly for specific Capital projects.
Q. Emily: the Province and Federal Govt are taking on large debts, we must expect this will trickle down and we’ll get less from them.
A. Ian: we don’t spend grants until we have them in hand. In any case, the impact would only be on Capital projects.
Suzanne Séguin then presented a motion which would mandate specific reductions:
- Aquatics Lifeguards – reduce hours 100% (additional $102,402) – depends on Beach closure, to be decided June 1 – withdrawn.
- Reduce utilities at CCC by 50% (additional $224,000) – not feasible because of complexity of HVAC – defeated
- Special Events – Reduce Movies in the Park by $500; Sandcastle Festival S16 000; Canada Day (further $2,000) for a total of $18,500 – already decided, these events will not happen although they will be replaced by virtual events – withdrawn.
- Art Gallery – Eliminate $5,000 for Victoria Hall 160th Anniversary (deferred to 2021) and $5,000 for Art Gallery 60th Anniversary – Total $10,000 – some of the money will be spent on other virtual events – defeated.
- Tourism – Remove remainder of advertising budget ($45,000) – some has already been spent and balance is mostly covered by revenue – withdrawn
- Staffing – Eliminate hiring of Manager of Recreation and Culture in 2020 until Service Delivery Review is complete. (remaining 25% – $28,453) – this was already decided in budget meeting – withdrawn.
After explanations and discussion, all these were either defeated or withdrawn – but at least there was discussion!
Q. Emily: If $15K is saved by not having hanging baskets, what’s happening with plants in the greenhouses?
A. Director Dean Hustwick: The Community Services Division was originally going to hire 46 summer students but has not. This left insufficient staff to water the baskets. However staff will still be able to plant around Vic Hall etc.
Q. Emily: Schedule E (showing reduced allocation to vehicle reserves) is not a real savings so is not a good idea.
A. Ian: This is simply a proposal and optional and not to be actioned right now.
Early in the meeting, Councillors Nicole Beatty and Adam Bureau moved to increase spending. Both motions had been made in earlier Council meetings but were deferred to this special meeting.
Nicole: Provide Fare Share Food Bank with a grant of $7000 with a report back by the end of the year. Passed 7-1 – Suzanne Séguin against.
Adam: Extend free parking from May 31 to August 31. This was approved. Although Adam was asking for Downtown only, in the end it was not clear if it applied elsewhere as well.
Although Capital is paid by a mix of grants, reserves, debentures (Loans) and direct to the taxpayer so does not have a significant immediate impact, Emily in particular was concerned and wanted to not spend when the future is so uncertain.
Ian’s report shows the status of most Capital projects with a notation on many that they are deferred or potentially deferred. Emily wanted all these to be in fact deferred. That is, to direct staff to not continue with these projects this year. They would stay as approved budget items so could be implemented in 2021 subject to Council approval of tender awards etc. There were 13 projects with this status and Emily’s suggestion was approved for 10 of them. Three others (listed below) were also deferred but Engineering design work on them could proceed.
- Abbot Boulevard Sidewalk Construction – engineering only in 2020
- Terry Fox Stormwater Management Pond Rehab – engineering only in 2020
- Bridge and Culvert Improvements – engineering only in 2020
Other Capital projects
Emily was concerned that the $127k allocated to waterfront Campground Improvements was committing to a total of $1.37M through 2022 and was not essential. Other Councillors disagreed and her motion to defer was defeated 5-2 (Suzanne supported her motion).
She also asked about the resurfacing of the Donegan Park C Diamond resurfacing and Tennis Courts resurfacing but her motions were defeated.
Her final motion to limit Capital spending was to remove $68K from the West Harbour project which would do preliminary design on re-configuring, boat lift-out and boat storage. She left untouched $20K intended to repave the Marina Parking lot. Her motion was defeated.
Savings with Staffing
One of the largest items of savings is $752,465 related to staffing. This was handled in a closed session but Deputy Mayor Suzanne Séguin provided an update after the meeting finished.
Most of the savings in the staffing ($752,465) which was confidential, is coming from reduced hours or positions, mainly students not being hired for the length of term they would normally have been hired for. Also some positions in this year’s budget have been deferred to 2021.
She also said that “everything we discussed today is remaining in the 2020 budget, but will be looked at again in 2 months.”
The biggest risk of course is that operations in the Town such as the CCC and Victoria Hall will not be 100% “back to normal” for the final 3 months of the year.
A big headache for Councillors and staff will be putting together a budget for 2021. I see that the County has directed their staff to target a base levy increase of 0% and an infrastructure levy of 1%. Staff had been asking for 4%.