The agenda for the Committee of the Whole Council Meeting on October 5 includes a report from Treasurer Ian Davey that provides details of the financials for the period to June 30, 2020. The usual format indicates how much of the budget is left for Revenues and Expenditures but for comparison purposes, he includes the 2019 report for a similar period. As expected, the numbers are heavily impacted by the effect of the pandemic but revenue is also severely impacted by unusually high successful tax appeals resulting in tax refunds of $1.3M. Of this, $600K hits Cobourg. The biggest amounts go to Home Depot and Walmart who had major refunds from 2017, 2018 and 2019. Surprisingly, the net impact on the budget is not too bad at all – at least not so far.
Ian’s report indicates that compared to budget, 68% of non-levy revenue is yet to be collected but that 58% of expenditures are yet to be spent. I think that indicates a problem and although an accountant may understand exactly how big that problem is, I can’t get my head around it. The basic problem is that revenues and expenditures are not spread evenly through the year but comparing to the previous year is helpful.
So let’s look closer. For 2020, $24.7M of revenue comes from the tax levy and $15M from other sources for a total of $39.7M. Of the $15M, to June 30 only $5.1M of revenue has come in. In 2019 for the same period, $5.8M had come in so it would appear that as of June 30, revenue is about $700K short.
Looking at Expenditures to June 30, $17.6M was spent in 2019 but in 2020 $16.9M had been spent to June 30 – so costs in the first half were less by the same amount as revenue. The department with the biggest reduction in expenditure is Parks and Recreation.
That indicates that to June 30, there is no problem assuming of course that the rest of the year will follow the same trend.
Ian reports that most taxpayers are paying their taxes on time so tax levy revenue is OK. And hopefully CCC and Concert Hall revenues will pick up in Q3 and Q4.
What’s needed now is a forecast of how the year will end and what should be done in 2021 although this will not be easy.